Transportation, the Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, the Executive Office of the President, and Independent Agencies: FY2006 Appropriations

CRS Report for Congress
Transportation, the Treasury, Housing and Urban
Development, the Judiciary, the District of
Columbia, the Executive Office of the President,
and Independent Agencies:
FY2006 Appropriations
Updated January 20, 2006
David Randall Peterman and John Frittelli
Coordinators
Resources, Science, and Industry Division


Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the regular appropriations bills that Congress considers each
year. It is designed to supplement the information provided by the Subcommittee on
Transportation, Treasury, and Housing and Urban Development, the Judiciary, District of
Columbia of the House Committee on Appropriations, and by the Subcommittee on
Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related
Agencies of the Senate Committee on Appropriations. It summarizes the current legislative
status of the bill, its scope, major issues, funding levels, and related legislative activity. The
report lists the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web Version of this document with active links is
available to congressional staff at
[http://beta.crs.gov/cli/level_2.aspx?P RDS_CLI_ITEM_ID=

73].



Transportation, the Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia,
the Executive Office of the President, and
Independent Agencies: FY2006 Appropriations
Summary
At the beginning of the 109th Congress, both the House and Senate Committees
on Appropriations reorganized their subcommittee structure, affecting the coverage
of the FY2006 appropriations bills. As a result, the appropriations subcommittees
that previously oversaw the Departments of Transportation and the Treasury, the
Executive Office of the President, and Independent Agencies now also oversee the
Department of Housing and Urban Development, the Judiciary, and (in the case of
the House, but not the Senate) the District of Columbia.
The Bush Administration requested $126.1 billion for these agencies for
FY2006, a slight decrease from the comparable figure of $127.7 billion for FY2005
(after a 0.83% across-the-board rescission that was included in the FY2005 Omnibus
Appropriations Act, P.L. 108-447).
The House-passed version of H.R. 3058, the FY2006 Departments of
Transportation, Treasury, and Housing and Urban Development, The Judiciary,
District of Columbia, and Independent Agencies appropriations bill, provided $140.0
billion for FY2006, $6.5 billion (5%) over comparable FY2005 enacted levels and
$9.7 billion (7%) over the Administration’s request. The House did not support most
of the Administration’s requested changes, while providing significant increases for
aviation, highway and transit programs, Amtrak, rental subsidies for the poor, and
housing for Native Americans.
The Senate-passed version of H.R. 3058 provided $142.0 billion. The Senate
Committee also did not support most of the Administration’s requested changes,
while also providing significant increases for several programs. The bill included
provisions that would restrict outsourcing of federal work and ease restrictions on
U.S. agricultural exports to Cuba.
The conference version of H.R. 3058 was passed by Congress on November 18,

2005; the President signed the bill into law on November 30, 2005 (P.L. 109-115).


The bill provided $137.6 billion in net budgetary resources, less than either the House
or Senate versions, but $4.1 billion (3%) more than the FY2005 enacted level and
$7.3 billion (6%) more than the Administration requested. Conferees did not include
provisions passed by both chambers easing restrictions on agricultural exports to
Cuba. Conferees added language prohibiting the use of funds in this bill for projects
using eminent domain to acquire land for private development. In a subsequent bill,
Congress enacted a one percent across-the-board rescission of non-emergency
FY2006 discretionary funding, and provided almost $15 billion in supplemental
funding to the Departments of Transportation and Housing and Urban Development,
the Judiciary, and the General Services Administration to respond to the
consequences of Hurricanes Katrina, Rita, and Wilma. This report will not be
updated.



CRS Telephone
Area of ExpertiseNameDiv.#
Title I: Department of Transportation
Aviation Safety, Federal AviationBart EliasRSI7-7771
Ad mi ni str a tio n
Airport Improvement Program, Transportation
Infrastructure Policy, Transportation TrustJohn FischerRSI7-7766
Fund s
Federal Railroad Administration; MaritimeJohn FrittelliRSI7-7033
Administration; Surface Transportation Board
Airport Improvement Program, FederalBob KirkRSI7-7769
Highway Administration
Amtrak, Federal Motor Carrier Safety
Administration, Federal Transit
Administration, High-Speed Rail, NationalRandy PetermanRSI7-3267
Highway Traffic Safety Administration,
Surface Transportation Safety
Title II: Department of the Treasury
Treasury, Internal Revenue ServiceGary GuentherG&F7-7742
Financial Center (FINCEN)William JacksonG&F7-7834
Title III: Department of Housing and Urban Development
Low-income housing programs and issues and
general HUD: Section 8, Public Housing,Maggie McCartyDSP7-2163
HOPE VI, HOME
Community Development programs and
issues: Community Development Block GrantsEugene BoydDSP7-8689
(CDBG), EZ/EC, Brownfields redevelopment
Housing programs and issues for special
populations: Elderly (202), Disabled (811),Libby PerlDSP7-7806
Homeless, AIDS housing
Homeownership and other housing issues: Bruce FooteG&F7-7805
FHA, Rural, Indian housing, Fair Housing
Title IV: The Judiciary
JudiciarySteve RutkusG&F7-7162
JudiciaryLorraine TongG&F7-5846
Division B: District of Columbia
District of ColumbiaEugene BoydG&F7-8689
Title V: Executive Office of the President and Funds Appropriated to the President
Executive Office of the PresidentBarbara SchwemleG&F7-8655



CRS Telephone
Area of ExpertiseNameDiv.#
Title VI: Independent Agencies
GenerallyVirginia McMurtryG&F7-8678
Architectural and Transportation BarriersNancy JonesALD7-6976
Compliance Board
Consumer Product Safety CommissionBruce MulockG&F7-7775
Election Assistance CommissionKevin ColemanG&F7-7878
Federal Deposit Insurance Corporation: OIGPauline SmaleG&F7-7832
Federal Election CommissionJoe CantorG&F7-7876
Federal Labor Relations AuthorityGerald MayerDSP7-7815
Federal Maritime CommissionJohn FrittelliRSI7-7033
General Services AdministrationStephanie SmithG&F7-8674
National Transportation Safety BoardBart EliasRSI7-7771
Merit Systems Protection BoardBarbara SchwemleG&F7-8655
National Archives; E-Government Fund inHarold RelyeaG&F7-8679
GSA
Office of Personnel Management; Office ofBarbara SchwemleG&F7-8655
Special Counsel
National Credit Union AdministrationPauline SmaleG&F7-7832
Neighborhood Reinvestment CorporationEugene BoydG&F7-8689
Robert GoldichFDT7-7633
Selective Service CommissionDavid Burrelli7-8033
United States Interagency Council onMaggie McCartyDSP7-2163
Ho me le ssne ss
US Postal Service Nye StevensG&F7-0208
Title VIII: General Provisions, Government-Wide
Government-wide General ProvisionsBarbara SchwemleG&F7-8655
Competitive SourcingL. Elaine HalchinG&F7-0646
CubaMark SullivanFDT7-7689
ALD = American Law Division
DSP = Domestic Social Policy Division
FDT = Foreign Affairs, Defense, and Trade Division
G&F = Government & Finance Division
RSI = Resources, Science, and Industry Division



Contents
Most Recent Developments..........................................1
Overview ........................................................2
New Appropriations Subcommittee Structure....................4
Title I: Transportation Appropriations.................................7
Department of Transportation Budget and Key Policy Issues............8
Amtrak ..................................................9
Aviation ................................................11
Airport Improvement Program...........................11
Essential Air Service..................................12
Surface Transportation.....................................12
Maritime Administration...................................12
Title II: Treasury Appropriations....................................13
Department of the Treasury Budget and Key Policy Issues.............13
Internal Revenue Service (IRS)..............................17
Title III: Department of Housing and Urban Development................20
Department of Housing and Urban Development Budget and Key Policy
Is s ues ..................................................22
Community and Economic Development Programs
Consolidation Proposal................................23
Section 8 Voucher Funding Level and Reform Proposal...........26
Section 811 Housing for the Disabled.........................27
HOPE VI...............................................28
New FHA Proposals......................................28
Title IV: The Judiciary............................................29
The Judiciary Budget and Key Policy Issues........................29
FY2006 Request..........................................33
House Committee Markup..................................33
House Action............................................34
Senate Committee Markup.................................34
Senate Action............................................34
Conference Action........................................34
Supreme Court.......................................35
U.S. Court of Appeals for the Federal Circuit...............35
Courts of Appeals, District Courts, and Other Judicial
Services, Salaries and Expenses.....................35
Court Security.......................................36
Defender Services....................................36
Administrative Provisions..............................36
Title V: Executive Office of the President and Funds Appropriated to the
President ....................................................38
Executive Office of the President Budget and Key Policy Issues........38



Independent Agencies Budget and Key Policy Issues.................42
Merit Systems Protection Board.............................44
Office of Personnel Management............................44
Office of Special Counsel..................................45
Federal Election Commission...............................45
General Services Administration (GSA).......................46
Federal Buildings Fund (FBF)...........................47
Electronic Government Fund (E-gov Fund)....................48
National Archives and Records Administration (NARA)..........48
Postal Service............................................49
Titles VII and VIII: General Provisions...............................50
Division B: District of Columbia Appropriations........................52
District of Columbia Budget and Key Policy Issues..................53
President’s Request.......................................53
District Budget...........................................53
House Bill..............................................53
Senate Bill..............................................53
Senate Bill General Provisions..............................54
Conference Bill..........................................54
Cuba Sanctions...............................................55
List of Tables
Table 1. Status of FY2006 Departments of Transportation, the Treasury,
and Housing and Urban Development, the Judiciary, the District of Columbia,
the Executive Office of the President, and Independent Agencies
Appropri at i ons ...............................................5
Table 2. Transportation/Treasury et al. Appropriations, by Title,
FY2005-FY2006 ..............................................5
Table 3. Funding Trends for Transportation/Treasury et al. Appropriations,
FY2001-FY2006 ..............................................6
Table 4. Title I: Department of Transportation Appropriations,
FY2005 to FY2006............................................7
Table 5. Title II: Department of the Treasury Appropriations,
FY2005 to FY2006...........................................14
Table 6. Title III: Housing and Urban Development Appropriations,
FY2005 to FY2006 ...........................................20
Table 7. Title IV: The Judiciary Appropriations,
FY2005 to FY2006...........................................29
Table 8. Title V: Executive Office of the President (EOP) and Funds
Appropriated to the President Appropriations, FY2005 to FY2006......38
Table 9. Title VI: Independent Agencies Appropriations, FY2005 to FY2006.43
Table 10. General Services Administration Appropriations,
FY2005 to FY2006...........................................46
Table 11. Division B: District of Columbia Appropriations,
FY2005 to FY2006...........................................52



Transportation, the Treasury, Housing and
Urban Development, the Judiciary, the
District of Columbia, the Executive Office of
the President, and Independent Agencies:
FY2006 Appropriations
Most Recent Developments
On December 30, 2005, President Bush signed the FY2006 Department of
Defense appropriations bill (P.L. 109-148), which included a one percent across-the-
board rescission of non-emergency federal discretionary funding for FY2006. This
bill also provided supplemental funding to several federal agencies to respond to the
consequences of Hurricanes Katrina, Rita, and Wilma, including $2.8 billion for the
Department of Transportation, $11.9 billion for the Department of Housing and
Urban Development, $38 million for the General Services Administration, and $18
million for the Judiciary.1
On November 30, 2005, President Bush signed H.R. 3058 into law (P.L. 109-2
115). The bill was passed by Congress on November 18. The bill provided $137.6
billion in net budgetary resources, less than either the House or Senate versions, but
$4.1 billion (3.0%) more than the FY2005 enacted level and $7.3 billion (5.6%) more
than the Administration requested.
On November 2, 2005, the House Committee on Appropriations published a
revised suballocation of budget allocations for FY2006 (H.Rept. 109-264). Among
the changes made by this report were a reduction in the suballocation (“302(b)
allocation”) for the House Appropriations Committee Transportation-Treasury-HUD-
The Judiciary-DC Subcommittee. The revised suballocation for discretionary budget
authority was $65.9 billion, $1 billion less than the previous suballocation (and $1
billion less than the discretionary funding level in the House-passed version of H.R.

3058, the Departments of Transportation, Treasury, and Housing and Urban


1 The FY2006 numbers in this report do not reflect either the across-the-board rescission or
the supplemental funding provided in P.L. 109-148.
2 The Senate, by unanimous consent, agreed to passage of the bill at such time as the Senate
received the paperwork from the House. Congressional Record, November 18, 2005,
S13418.

Development, The Judiciary, District of Columbia, and Independent Agencies
Appropriations bill).3
On October 20, 2005, the Senate passed H.R. 3058, the FY2006 Departments
of Transportation, Treasury, and Housing and Urban Development, The Judiciary,
District of Columbia, and Independent Agencies Appropriations bill. The Senate
added the text of S. 1446, the Senate’s FY2006 appropriations bill for the District of
Columbia, to the bill, and approved an overall funding level of $141.6 billion, 6%
more than provided in FY2005 and 9% more than the Administration request. The
Senate bill includes provisions that would restrict outsourcing of federal work and
ease restrictions on agricultural exports to Cuba.
On June 30, 2005, the House passed H.R. 3058, the FY2006 Departments of
Transportation, Treasury, and Housing and Urban Development, The Judiciary,
District of Columbia, and Independent Agencies Appropriations bill. The House
approved an overall funding level of $139.1 billion, a 6% increase over comparable
FY2005 funding and a 7% increase over the Administration’s request. The House
approved the Appropriations Committee’s recommendations to provide the same pay
raise (3.1%) to federal civilian workers as that requested for uniformed military
personnel for calendar year 2006, and to ease restrictions on U.S. agricultural exports
to Cuba. The House approved several amendments to the bill, including ones
increasing funding for Amtrak and the Department of Housing and Urban
Development, and restricting outsourcing of federal work.
Overview
The President’s FY2006 request for the programs covered by this appropriations
bill was $126.1 billion. This was $1.6 billion (1%) below the FY2005 enacted level
of $127.7 billion (after a 0.83% rescission). The FY2006 request included cuts from
the FY2005 funding level for the Department of Housing and Urban Development
($2.8 billion, a 9% reduction) and the Department of Transportation ($1.4 billion, a
2% reduction). The FY2006 request for the Executive Office of the President was
$300 million less than the FY2005 figure; that reduction was largely due to the
proposed transfer of the High Intensity Drug Trafficking Areas Program ($227
million in FY2005) from the Executive Office of the President to the Department of
Justice, and to an FY2005 supplemental appropriation of $70 million to the
Executive Office of the President (P.L. 108-324) for unanticipated needs (for
hurricane disaster relief assistance through the American Red Cross).
The President’s FY2006 budget request proposals included:
!zeroing out of funding for Amtrak, the provider of intercity
passenger rail service, which received $1.2 billion in FY2005;
!reducing funding for the Federal Aviation Administration’s (FAA)
Airport Improvement Program (AIP) to $3.0 billion, $600 million


3 Much of the funding in the annual Transportation et al. appropriations bill is not in the
form of discretionary budget authority, thus the total funding level is much higher than the
discretionary funding level.

below its ‘guaranteed’ authorization level, which would make the
entire appropriations bill subject to a point of order. The proposed
level is also below the AIP formula threshold of $3.2 billion, which
could result in a halving of most AIP formula distributions;
!eliminating the community and economic development programs
under the Department of Housing and Urban Development (HUD),
along with those of several other agencies, and replace them with a
new program administered by the Department of Commerce. The
proposed funding for the new program is $1.9 billion (34%) less
than the aggregate FY2005 funding for the programs proposed for
elimination (reduced from $5.6 billion for FY2005 to $3.7 billion for
FY2006);
! reducing the funding for housing for disabled persons under HUD
by $118 million (50%), from $238 million for FY2005 to $120
million for FY2006;
!eliminating the annual $29 million payment to the United States
Postal Service for revenue forgone, as well as the absence of any
funding requested for Postal Service security measures.
Neither the House nor the Senate supported most of these proposed changes.
The House-passed version of H.R. 3058, the FY2006 Departments of Transportation,
Treasury, and Housing and Urban Development, The Judiciary, District of Columbia,
and Independent Agencies Appropriations bill, provided $140.0 billion, $6.5 billion
(5%) over comparable FY2005 enacted levels and $9.7 billion (7%) over the
Administration’s request. The bill generally reflected the House Committee on
Appropriations recommendations, including the overall funding level; the House did
approve amendments increasing Amtrak’s FY2006 funding from $550 million to
almost $1.2 billion, delete the House Committee’s provision barring federal
assistance for Amtrak’s routes whose subsidy per passenger exceeds $30, and
approve amendments increasing funding for several programs within the Department
of Housing and Urban Development. The White House objected to several
provisions in the bill, and issued a veto threat against a provision easing a restriction
on agricultural exports to Cuba.4
The Senate-passed version of H.R. 3058, to which was added S. 1446, the
FY2006 appropriations bill for the District of Columbia, provided $142.0 billion.
The bill generally reflected the Senate Committee on Appropriations
recommendations, including the overall funding level; among the amendments
approved by the Senate were amendments deleting Senate Appropriations Committee
provisions which restricted Amtrak service and allowed Amtrak to charge commuter
authorities for track access, and an amendment limiting the use of eminent domain
powers by public authorities for economic development projects that result in
primarily private gain. The White House objected to several provisions in the bill,
and issued veto threats against some of them.5


4 White House, Statement of Administration Policy: H.R. 3058, June 29, 2005.
5 White House, Statement of Administration Policy: H.R. 3058, October 19, 2005.

The conference version of H.R. 3058 was passed by the House on November 18,
and by the Senate on November 21, 2005. It was signed into law on November 30,
2005 (P.L. 109-115). The conference bill provided $137.6 billion in net budgetary
resources. This was $2.4 billion less than the House bill and $4.4 billion less than
the Senate bill, but $4.1 billion (3.0%) more than the FY2005 enacted level and $7.3
billion (5.6%) more than the Administration requested. The largest increases went
to HUD ($2.1 billion over FY2005 funding and $4.8 billion more than requested) and
DOT ($1.0 billion over FY2005 funding and $2.4 billion more than requested).
Conferees included directives to Amtrak (the Administration had threatened to veto
the bill if it provided funding for Amtrak in the absence of any reform measures) and
language that limits outsourcing of federal jobs performed by more than ten people
unless the savings would exceed the lesser of 10% of or $10 million. Conferees did
not include provisions passed by both chambers easing restrictions on agricultural
exports to Cuba, which had elicited veto threats from the Administration. Conferees
also did not include House language that would have prohibited the use of federal or
D.C. funds to enforce certain gun laws in the District of Columbia. Conferees added
language prohibiting the use of funds in this bill for projects using eminent domain
to acquire land for projects that primarily benefit private entities. Conferees also
added language that amended provisions in the recently-passed surface transportation
reauthorization legislation (SAFETEA-LU, P.L. 109-59) regulating household
moving companies. SAFETEA-LU allowed state consumer protection agencies to
enforce federal laws regulating moving companies; conferees added language
limiting the ability of state agencies to enforce these laws (the limitation would
expire after one year).
New Appropriations Subcommittee Structure. In early 2005, the House
and Senate Committees on Appropriations reorganized their subcommittee structures.
The House Committee on Appropriations reduced its number of subcommittees to
ten. This change combined the Transportation, Treasury, and Independent Agencies
subcommittee with the District of Columbia subcommittee; to the resulting
subcommittee, jurisdiction over appropriations for the Department of Housing and
Urban Development and the Judiciary as well as several additional independent
agencies was also added.
The Senate Committee on Appropriations reduced its number of subcommittees
to twelve. The Senate also added jurisdiction over appropriations for the Department
of Housing and Urban Development and the Judiciary to the Transportation,
Treasury, and Independent Agencies subcommittee; the Senate retained a separate
District of Columbia Appropriations subcommittee. As a result, the area of coverage
of the House and Senate subcommittees with jurisdiction over this appropriations bill
are almost, but not quite, identical; the major difference being that in the Senate the
appropriations for the District of Columbia originate in a separate bill. The Senate
Appropriations Committee reported out a Transportation et al. appropriations bill
(H.R. 3058) and a District of Columbia appropriations bill (S. 1446); the Senate
added the text of S. 1446 to H.R. 3058 during floor consideration. The conference
agreement reflects that structure: the appropriations for all agencies other than the
District of Columbia are in Division A of the bill, with the District of Columbia
appropriations in Division B.
Table 1 notes the status of the FY2006 Transportation et al. appropriations bill.



Table 1. Status of FY2006 Departments of Transportation, the
Treasury, and Housing and Urban Development, the Judiciary,
the District of Columbia, the Executive Office of the President,
and Independent Agencies Appropriations
Subco mmit t ee ConferenceRepo rt
Markup House House Sena t e Sena t e Co nf. Approval Public
Repo rt Passage Repo rt Passage Repo rt La w
H o use Sena t e H o use Sena t e
H.Rep t. 6/30/05 S.Rep t. 10/20/05 H.Rep t. 11/18 11/21 11/30/05
6/15/057/19/05109-153405-18109-10993-1109-307392-31UCP.L.
6/21/05 7/21/05 109-115
UC: unanimous consent.
Table 2 lists the total funding provided for each of the titles in the bill (the last
two titles cover general provisions affecting this bill and general provisions affecting
the entire federal government) for FY2005 and the amount requested for that title for
FY2006.
Table 2. Transportation/Treasury et al. Appropriations, by Title,
FY2005-FY2006
(millions of dollars)
FY2006 FY2006 FY2006
FY2005 FY2006 House Sena t e Ena c t e d
Tit l e Ena c t e d* Request P a sse d P a sse d **
Title I: Department of$59,723$58,297$63,469$64,244$60,677
T r ansp o r tatio n
Title II: Department of the Treasury11,21311,64911,52911,69811,689
Title III: Housing and Urban31,91529,14733,67134,75933,974
Development
Title IV: The Judiciary5,4265,9715,7685,7785,756
Title V: Executive Office of the834525779731736
P r esident
Title VI: Independent Agencies19,75619,94819,96719,98719,989
Title VII-VIII: General Provisions(125)
Div. B: District of Columbia556573603593603
To tal 133,497 130,310 139,986 141,990 137,623
Source: Budget table in H.Rept. 109-307. “Total” is fromNet total budgetary resources” line in
budget table and does not reflect scorekeeping adjustments, though the figures for titles do reflect
scorekeeping. Totals may not add due to rounding and scorekeeping adjustments.
* The FY2005 Omnibus appropriations bill contained an across-the-board rescission of 0.83%; that
rescission is reflected in these figures.
** The FY2006 figures in this report do not reflect either the one percent across-the-board rescission
nor the supplemental funding provided in P.L. 109-148, the FY2006 Defense appropriations bill.



Table 3 shows funding trends over the five-year period FY2001-FY2005, and
the amounts requested for FY2006, for the titles in the bill. The agencies generally
experienced funding increases during the period FY2001-FY2006.
Table 3. Funding Trends for Transportation/Treasury et al.
Appropriations, FY2001-FY2006
(billions of current dollars)
DepartmentFY2001cFY2002FY2003dFY2004eFY2005f FY2006
Title I: Transportationa$51.9$57.4$55.7$58.4$59.6$60.7
Title II: Treasuryb9.910.510.811.111.211.7
Title III: Housing and28.530.231.031.231.934.0
Urban Development
Title IV: Judiciary4.34.75.45.25.45.8
Title V: Executive0.70.80.80.80.80.7
Office of the President
Title VI: Independent 19.820.0
Agencies
Division B: District of0.50.40.50.50.60.6
Co lumb ia
Source: United States House of Representatives, Committee on Appropriations, Comparative
Statement of Budget Authority tables from fiscal years 2001 through 2006.
a. Figures for Department of Transportation appropriations for FY2001-FY2003 have been adjusted
for comparison with FY2004 and later figures by subtracting the United States Coast Guard, the
Transportation Security Administration, the National Transportation Safety Board, and the
Architectural and Transportation Barriers Compliance Board, and by adding the Maritime
Ad mi ni st r a t i o n.
b. Figures for Department of the Treasury appropriations for FY2001-FY203 have been adjusted for
comparison with FY2004 and later figures by subtracting the Bureau of Alcohol, Tobacco, and
Firearms; the Customs Service; the United States Secret Service; and the Law Enforcement
Training Center.
c. FY2001 figures reflect 0.22% across-the-board rescission.
d. FY2003 figures reflect 0.65% across-the-board rescission.
e. FY2004 figures reflect 0.59% across-the-board rescission.
f. FY2005 figures reflect 0.83% across-the-board rescission.



Title I: Transportation Appropriations
Table 4. Title I: Department of Transportation Appropriations,
FY2005 to FY2006
(in millions of dollars — totals may not add)
FY2006 FY2006
FY2005a FY2006 House Sena t e FY2006
Department or Agency (Selected Accounts)EnactedRequestPassedPassedEnacted
Office of the Secretary of Transportation$238$209$198$223$239
Essential Air Serviceb52546060
Federal Aviation Administration (FAA)13,54912,71014,63113,61013,815
Operations (trust fund & general fund)7,7138,2018,3978,1768,186
Facilities & Equipment (F&E) (trust fund)2,5252,4483,0532,4482,540
Grant-in-aid Airports (AIP) (trust fund)
(limit. on oblig.)3,5173,0103,6303,5203,570
Research, Engineering & Development
(trust fund)130130130135138
Federal Highway Administration (FHWA)35,83435,43937,02638,71334,669
(Limitation on Obligations)34,42234,70036,28740,19436,032
(Exempt Obligations)739739739739739
Additional funds (trust fund)735
Additional funds (general fund)1,3158020
Federal Motor Carrier Safety Administration
(FMCSA) 444 465 501 490 495
National Highway Traffic Safety
Administration (NHTSA)454696782785815
Federal Railroad Administration (FRA)1,4325521,3321,6691,526
Amtrak1,2071,1761,4501,315
Federal Transit Administration (FTA)7,6467,7818,4828,2098,590
General Funds9569561,2721,3841,610
Trust Funds6,6916,8257,2106,8256,980
St. Lawrence Seaway Development
Corption 1616161616
Maritime Administration (MARAD)305294291323301
Pipeline and Hazardous Materials Safety
Ad ministratio n 6 9 117 116 116 116
Pipeline safety program6973737373
Emergency preparedness grants14141414
Research and Innovative Technology
Adminstraio 476446
Ofice of Inspector Genral5962626262
Surface Transportation Board2023252325
Total, Department of Transportation59,72358,29763,46964,24460,677



Note: Figures are from the budget authority table in H.Rept. 109-307. Because of differing treatment
of offsets, the totals will not always match the Administrations totals. The figures within this table
may differ slightly from those in the text due to supplemental appropriations, rescissions, and other
funding actions. Columns may not add due to rounding or exclusion of smaller program line-items.
a. These figures reflect the 0.83% across-the-board rescission included in P.L. 108-447.
b. These amounts are in addition to the $50 million annual authorization for the Essential Air Service
program; thus, the total FY2005 funding would be $102 million ($50 million + $52 million).
Department of Transportation Budget and Key Policy Issues6
The President’s budget proposed $58.3 billion for the Department of
Transportation (DOT). This was $1.4 billion (2%) less than the $59.7 billion enacted
for FY2005. The major funding changes requested from FY2005 were in the
requests for Amtrak (no funding requested, resulting in a $1.2 billion (100%)
reduction below FY2005) and in the Federal Aviation Administration’s Airport
Improvement Program ($500 million (14%) below FY2005).
The House Committee on Appropriations recommended $62.8 billion for DOT,
$4.4 billion (8%) above the Administration request and $3.0 billion (5%) above
FY2005 funding. The primary changes from the President’s request were additional
funding for the Federal Aviation Administration ($1.2 billion), the Federal Highway
Administration ($1.6 billion), and Federal Transit Administration ($700 million). In
the case of the Federal Aviation Administration, the increase brought the Airport
Improvement Program and Facilities and Equipment Program up to their FY2006
authorized funding levels. In the case of the highway and transit programs, the
increase brought those administrations up to the funding levels authorized in the
House’s version of surface transportation authorization legislation, which is currently
in conference. The Committee also recommended $550 million in passenger rail
funding, more than the Administration requested but less than the $1.2 billion
enacted in FY2005. The House supported the Committee’s recommendations
regarding transportation funding, except that the House voted to add another $550
million for Amtrak (discussed below), which increased the DOT total to $63.5
billion.
The Senate Committee on Appropriations recommended $64.2 billion for DOT.
Relative to the House-passed bill, the Senate Committee recommended increases for
the Office of the Secretary, the federal-aid highway program, Amtrak, and the
Maritime Administration, and recommended decreases for the Federal Aviation
Administration and the Federal Transit Administration. The Senate supported the
Committee’s recommendations regarding transportation funding. The Senate did
approve amendments eliminating Senate Appropriations Committee
recommendations to restrict certain Amtrak services and allow Amtrak to charge
commuter authorities for access to the Northeast Corridor.


6 For more information about Department of Transportation appropriations issues, see CRS
Report RL32945, FY2006 Appropriations for the Department of Transportation, by David
Randall Peterman.

The conference version of H.R. 3058 provided $60.7 billion in net budgetary
resources for the Department of Transportation, less than either the House or Senate
versions, but $1.0 billion (1.6%) more than the FY2005 enacted level and $2.4 billion
(4.1%) more than the Administration requested. The bill included $1.3 billion for
Amtrak, as well as numerous provisions governing Amtrak’s operations.7
The Administration’s budget for DOT identified three agency-specific goals
influencing the budget request: improving aviation and surface transportation safety
through increased funding for safety programs, improving transportation mobility
through investments in additional infrastructure and through investments in
technology to increase the effective capacity of the transportation systems, and
improving passenger rail services between cities by restructuring federal intercity
passenger rail policy and its provider, Amtrak.
Amtrak. Amtrak is a quasi-governmental corporation that operates and
maintains rail infrastructure in the northeast and operates passenger rail service
throughout the country. It operates at a deficit and requires federal support to
continue operations. The President’s budget did not request any funding for Amtrak
for FY2006; Amtrak received $1.2 billion in FY2005. The Administration requested
$360 million for the Surface Transportation Board to maintain commuter rail service
that depends on Amtrak services in the event that Amtrak ceases operations during
FY2006. The Administration’s proposal received bipartisan criticism in both the
House and the Senate. The Administration asserted that their reauthorization plan
for Amtrak (109th Congress: H.R. 1713; 108th Congress: S. 1501/H.R. 3211) receivedth
little attention from the 108 Congress, so they requested no FY2006 money for
Amtrak in order to spur congressional reauthorization action.8 Their budget request
asserted that “with no subsidies, Amtrak would quickly enter bankruptcy, which
would likely lead to the elimination of inefficient operations and the reorganization9
of the railroad through bankruptcy proceedings.” Others were less certain of the
outcome of an Amtrak bankruptcy proceeding.10 The Administration also asserted
that it would support increased funding for intercity passenger rail if significant
reforms are enacted. Some Members of Congress questioned where that additional
money would come from, given the competing demands from other transportation
modes and from other agencies in the appropriations bill that funds DOT.


7 After enactment of this appropriations bill, Congress passed the FY2006 Defense
appropriations bill, which includes a one-percent across-the-board rescission of non-
emergency federal FY2006 discretionary funding, a $1.1 billion rescission of unobligated
highway funding, and a supplemental appropriation of $2.8 billion to DOT to respond to the
consequences of Hurricanes Katrina, Rita, and Wilma.
8 Norman Mineta, Secretary, United States Department of Transportation, in transcript of
the Senate Committee on Appropriations Subcommittee on Transportation, Treasury, the
Judiciary, and Housing and Urban Development, Hearing on FY2006 Appropriations.
9 Office of Management and Budget, Budget for Fiscal Year 2006, p. 243.
10 Government Accountability Office, Intercity Passenger Rail: Potential Financial Issues
in the Event that Amtrak Undergoes Liquidation, GAO-02-871, September 2002; CRS
Report RL31550, Railroad Reorganization Under the U.S. Bankruptcy Code: Implications
of a Filing by Amtrak, by Robin Jeweler.

The House Committee on the Budget encouraged the House to continue funding
Amtrak11, and the House Committee on Transportation and Infrastructure marked up
H.R. 1630, the Amtrak Reauthorization Act of 2005, on April 27, 2005; it would
authorize $2 billion annually for three years for Amtrak as it is currently structured.
The bill has not been reported out of committee. Similar legislation was reported out
by the Committee during the 108th Congress, but was not acted upon. The Senate
Committee on Commerce, Science, and Transportation reported out S. 1516, the
Passenger Rail Investment and Improvement Act of 2005 (S.Rept. 109-143) on
October 18, 2005; it would authorize $11 billion for Amtrak over six years and make
changes to Amtrak’s operations. The Senate attached language similar to S. 1516 to
the budget reconciliation bill (S. 1932) on November 3, 2005; the amendment was
approved by a vote of 93-6. The House passed an amended version of S. 1932,
which did not include Amtrak authorization language, on November 18, 2005.
The House Committee on Appropriations recommended $550 million for grants
to Amtrak for FY2006. The Committee also recommended a financial performance
measure for Amtrak’s individual routes. Routes requiring a federal subsidy greater
than $30 per passenger would no longer be eligible for federal support.
In its consideration of H.R. 3058, the House approved two amendments
concerning Amtrak. One amendment, agreed to by voice vote, increased Amtrak’s
FY2006 appropriation from $550 million to $1.176 billion. This is $31 million less
than the $1.207 billion Amtrak is receiving in FY2005 (after the 0.83% across-the-
board rescission), and significantly less than the $1.4 billion the DOT IG testified
Amtrak needed in FY2006. But it is $276 million more than the House approved for
Amtrak when it passed the FY2005 appropriations bill for transportation (108th
Congress: H.R. 5025). The other amendment, approved by a vote of 269-152,
deleted the Appropriation Committee’s financial performance requirement for
Amtrak’s routes that would have eliminated federal aid for Amtrak’s long-distance
routes.
The Senate Committee on Appropriations recommended $1.45 billion for
Amtrak, $243 million over the FY2005 enacted level. The Committee also
recommended several provisions that would affect Amtrak’s operations: a
requirement that Amtrak adopt a managerial cost accounting system that can identify
the average and marginal costs of services provided; a requirement that, beginning
six months after adoption of the FY2006 appropriations act, no federal funding could
be used to subsidize losses on food and beverage service or sleeper car service; and
permission to impose fees on passenger tickets to help fund capital improvements,
and on commuter rail systems using the Northeast Corridor for their share of direct
maintenance costs on the Corridor.
In its consideration of H.R. 3058, the Senate supported the Amtrak funding level
recommended by the Committee on Appropriations. The Senate approved two
amendments deleting some of the Amtrak provisions recommended by the
Committee: one amendment deleted the restriction on food and beverage service and
sleeper car service; the other deleted the permission to impose fees on commuter rail


11 H.Rept. 109-17, on the FY2006 Budget Resolution (H.Con.Res. 95), 30.

authorities using the Northeast Corridor. The White House issued a veto threat
against the Senate’s Amtrak funding level in the absence of fundamental reforms to
Amtrak . 12
On November 9, the House voted (by voice vote) to instruct conferees to agree
to the Senate level for Amtrak funding. The conference committee on H.R. 3058
provided $1.3 billion for Amtrak: $495 million for operating subsidy grants, $780
million for capital and debt service grants, and $40 million in efficiency incentive
grants. These appropriations were accompanied by numerous provisions affecting
Amtrak’s receipt and use of these funds.
Aviation. The Federal Aviation Administration’s (FAA) budget provides both
capital and operating funding for the nation’s air traffic control system, as well as
providing federal grants to airports for airport planning, development, and expansion
of the capacity of the nation’s air traffic infrastructure. The President’s budget
requested $12.7 billion for FY2006, $839 million less than was enacted for FY2005.
The President’s request included $25 million to hire 1,249 air traffic controllers in
FY2006. This was expected to result in a net gain of around 600 controllers, since
around 650 controllers are expected to leave through attrition.
The House Committee recommended $14.6 billion for FY2006, $1.1 billion
over the level enacted for FY2005 and $1.9 billion over the Administration request.
The increases brought the FAA’s capital programs up to their FY2006 authorized
funding levels. The House supported this recommendation.
The Senate Committee on Appropriations recommended $14.3 billion. The
difference from the House-passed level was chiefly in lower funding for operations
and grants-in-aid to airports. The Senate approved the recommended level.
The conference committee provided $13.8 billion for aviation, after a rescission
of $1.0 billion of contract authority.
Airport Improvement Program. The President’s budget proposed a cut to
the Airport Improvement Program (AIP), from $3.5 billion in FY2005 to $3.0 billion
for FY2006. The House provided $3.6 billion, the FY2006 authorized level; the
Senate provided $3.5 billion. Conferees provided $3.55 billion.
AIP funds are used to provide grants for airport planning and development, and
for projects to increase airport capacity (such as building new runways) and other
facility improvements. The Administration asserted that airports could compensate
for the proposed reduction in AIP funding by increasing their use of passenger
facility charges. The Administration estimated that airports could raise an additional
$350 to $400 million annually by increasing passenger facility fees to the maximum
allowed by law. Some Members of Congress questioned the wisdom of imposing fee
increases on an airline industry struggling with the impact of high fuel costs.


12 White House, Statement of Administration Policy: H.R. 3058, October 19, 2005, 1.

Essential Air Service. The President’s budget proposed a $52 million (51%)
reduction in funding for the Essential Air Service program, from $102 million
(FY2005) to $50 million. The House Committee on Appropriations recommended
$104 million. The House-passed bill provided $104 million, though the source of
funding for $54 million of that was struck from the bill on a point of order. The
Senate-passed bill provided $110 million. The conference bill provided $110
million.
This program seeks to preserve air service to small airports in rural communities
by subsidizing the cost of that service. Supporters of the Essential Air Service
program contend that preserving airline service to rural communities was part of the
deal Congress made in exchange for deregulating airline service in 1978, which was
expected to reduce air service to rural areas. Some Members of Congress expressed
concern that the proposed cut in funding for the Essential Air Service program could
lead to a reduction in the transportation connections of rural communities. Previous
budget requests from the current Administration, as well as budget requests from the
previous Administration, have also proposed reducing funding to this program.
Surface Transportation. The President’s budget requested $35.3 billion for
federal highway programs, slightly less than the $35.7 billion provided for FY2005,
and $7.8 billion for federal transit programs, slightly more than the $7.6 billion
provided for FY2005. The House approved $37.0 billion for federal highway
programs and $8.5 billion for federal transit programs. The Senate approved $38.7
billion for federal highway programs and $8.2 billion for federal transit programs.
The conference bill provided $36.7 billion13 for federal highway programs and $8.59
billion for federal transit programs.
The funding authorization for federal highway and transit programs was
increased as a result of passage of H.R. 3, the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU)(P.L. 109-59). The
Act provides an FY2006 guaranteed authorization of $38.6 billion for the federal
highway program and $8.6 billion for the federal transit programs.
Maritime Administration. The Administration requested $220 million for the
Maritime Administration for FY2006, $85 million (28%) below the $305 million
enacted for FY2005. The major change was in the National Defense Tanker Vessel
Construction Program; the Administration did not request any new funding for this
program, and requested that the $74 million Congress appropriated in FY2005 for
this program be rescinded. The Committee on Appropriations recommended $291
million; the Committee did not provide any new funding for the Tanker Vessel
Construction Program, but did not rescind the FY2005 funding. The House
supported the Committee’s recommendations. The Senate Committee on
Appropriations recommended $323 million, including $25 million for the Tanker
Vessel Construction Program; the Senate supported that recommendation. Conferees


13 $36.0 billion in obligation limitations and $739 million in exempt obligations. A $2.0
billion rescission of contract authority brings the net total after score-keeping adjustments
down to $34.7 billion.

provided $301 million, and neither rescinded previous funding for the Tanker Vessel
Construction Program nor provided any new funding for the program.
This program is intended to decrease the Department of Defense’s reliance on
foreign-flag oil tankers by supporting the construction of up to five privately-owned
product-tanker vessels in the United States. It would provide up to $50 million per
vessel for the construction, in U.S. shipyards, of commercial tank vessels that are
capable of carrying militarily useful petroleum products and that would be available
for the military’s use in time of war.
Title II: Treasury Appropriations
Department of the Treasury Budget and Key Policy Issues14
This section examines the FY2006 budget for the Treasury Department and its
operating bureaus. The FY2006 budget for its largest operating bureau, the Internal
Revenue Service (IRS), is examined in the following section.
In FY2005, Treasury received $11.218 billion in appropriated funds — or 1.1%
more than it received in FY2004. Most of this money (about 91%) was used to
finance the operations of the IRS, whose budget was set at $10.236 billion. The
remaining $982 million was distributed in the following manner among Treasury’s
other bureaus and departmental offices: departmental offices (which includes the
Office of Terrorism and Financial Intelligence or TFI), $156 million; Office of
Foreign Assets Control (OFAC), $22 million; department-wide systems and capital
investments, $32 million; Office of Inspector General, $16 million; Treasury
Inspector General for Tax Administration (TIGTA), $128 million; Air Transportation
Stabilization program, $2 million; Community Development Financial Institutions
Fund (CDFI), $55 million; Treasury building and annex repair and restoration, $12
million; Financial Crimes Enforcement Network (FinCEN), $72 million; Financial
Management Service, $229 million; Alcohol and Tobacco Tax and Trade Bureau,
$82 million; and Bureau of the Public Debt, $174 million. These amounts reflected
the 0.83% across-the-board cut (or rescission) in non-defense discretionary spending
enacted for FY2005.


14 For more information on the proposed budget for the Treasury, see CRS Report RL32898,
Appropriations for the Treasury Department and Internal Revenue Service in FY2006:
Issues for Congress, by Gary Guenther.

Table 5. Title II: Department of the Treasury Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2006 FY2006
FY2005 FY2006 House Sena t e FY2006
Program or AccountEnacted*RequestPassedPassedEnacted
Departmental Offices$156$195$157$198$197
Office of Foreign Asset Control22
Department-wide Systems and Capital
Investms 3224212424
Office of Inspector General1617171717
Treasury Inspector General for Tax
Ad ministratio n 128 133 133 133 133
Air Transportation Stabilization
Program23 33
Community Development Financial
Institutions Fund 558555555
Treasury Building and Annex Repair
and Retoraton1210101010
Financial Crimes Enforcement Network7274747474
Financial Management Service229236236236236
Alcohol and Tobacco Tax and Trade
Bureau 8262919191
Bureau of the Public Debt174177177177177
Internal Revenue Service, Total10,23610,67910,55610,67910,672
Processing, Assistance and
Management4,0574,1824,1374,137
Tax Law Enforcement4,3644,5804,7264,726
Information Systems1,5781,5751,5981,599
Business Systems Modernization203199199199199
Health Insurance Tax Credit
Admistaion 3520202020
Total Appropriations, Dept. of the
Treasury 11,218 11,649 11,529 11,698 11,689
Source: Figures are from a budget authority table provided by the House Committee on Appropriations, except
Senate Committee figures are from a budget table in S.Rept. 109-109. Because of differing treatment of offsets,
the totals will not always match the Administration’s totals. The figures within this table may differ slightly from
those in the text due to supplemental appropriations, rescissions, and other funding actions. Columns may not
add due to rounding or exclusion of smaller program line-items.
*FY2005 figures reflect an across-the-board rescission of 0.83%.
For FY2006, the Bush Administration asked Congress to provide Treasury with
$11.649 billion in appropriated funds — or 3.8% more than the amount enacted for
FY2005. Under the request, the vast majority of this requested funding would have
gone to the IRS, whose budget would have totaled $10.679 billion. The remaining
funds would have been distributed as follows: departmental offices, $195 million;



departmental systems and capital investments, $24 million; Office of Inspector
General, $17 million; TIGTA, $133 million; Air Transportation Stabilization
program, $3 million; CDFI, $8 million; Treasury building and annex repair and
restoration, $10 million; FinCEN, $74 million; Financial Management Service, $236
million; Alcohol and Tobacco Tax and Trade Bureau, $62 million; and Bureau of the
Public Debt, $177 million. All accounts except those for departmental systems and
capital investments and Treasury building and annex repair and restoration would
have been funded at higher levels than in FY2005. The Administration also
requested that funding for OFAC be folded into the budget for departmental offices
and not treated as a separate account. Under the Administration’s proposed budget,
total full-time employment at Treasury was projected to rise from 113,002 in FY2005
to 113,242 in FY2006.15
According to budget documents released by the Treasury Department, its
FY2006 budget request was intended to support a variety of strategic objectives. The
most important were improving taxpayer compliance with tax laws; modernizing
IRS’s computer and management systems; enhancing Treasury’s capability to analyze
and disrupt terrorist financing and other financial crimes; and maintaining and
safeguarding the integrity of federal finances and the U.S. financial system.
Congressional action on the Administration’s budget request for FY2006
commenced in the House with a series of hearings held by the House Appropriations
Subcommittee on Transportation, Treasury, Housing and Urban Development, the
Judiciary, and District of Columbia in March, April, May, and June of 2005. On
June 15, the Subcommittee approved by voice vote a measure (H.R. 3058) to provide
funding for Treasury and a handful of other federal agencies in FY2006. The
Appropriations Committee favorably reported by voice vote (H.Rept. 109-153) an
amended version of H.R. 3058 on June 21. Following the consideration of 48
amendments spread over two days of floor debate, the House approved the measure
on June 30 by a vote of 405 to 18 and sent it on to the Senate.
As passed by the House, H.R. 3058 would have given the Treasury Department
$11.529 billion in funding in FY2006 — or $311 million more than the amount
enacted for FY2005 but $120 million less than the level of funding requested by the
Bush Administration. The IRS would have received $10.556 billion to fund its
operations — or $320 million more than its budget in FY2005 but $123 million less
than the amount requested by the Administration. As recommended by the
Appropriations Committee in its report on H.R. 3058, the House denied a request by
the Administration to combine funding for taxpayer service, tax law enforcement,
and IRS information systems into a new single appropriations account for tax
administration and operations. In addition, the measure would have raised funding
in FY2006 relative to the previous fiscal year for the following accounts: Alcohol
and Tobacco Tax and Trade Bureau, +$9 million; Financial Management Service,
+$7 million; TIGTA, +$5 million; Bureau of Public Debt, +3 million; FinCEN, +$2
million; and departmental offices (which includes OFAC and TFI) and Office of
Inspector General, +$1 million. Three accounts would have received less in FY2006
than in FY2005: department-wide systems and capital investments, -$11 million;


15 U.S. Treasury Department, Budget in Brief FY2006 (Washington: Feb. 2005), p. 8.

Treasury building and annex repair and restoration, -$2 million; and CDFI, -$0.1
million. And one existing account would have received no funding, effectively
canceling it: the Air Transportation Stabilization program.
In the Senate, the Appropriations Committee favorably reported by a vote of 28
to 0 on July 21 (S.Rept. 109-109) an amended version of H.R. 3058 as passed by the
House. After three days of debate and the consideration of over 100 amendments,
the full Senate approved by a vote of 93 to 1 on October 20 a version of H.R. 3058
that differed in some significant ways from the House-passed version.
As passed by the Senate, H.R. 3058 would have given Treasury $11.698 billion
in funding in FY2006 — or $485 million more than the amount enacted for FY2005,
$49 million more than the amount requested by the Bush Administration, and $169
million more than the amount approved by the House. The IRS would have received
$10.679 billion — or $443 million more than its budget in FY2005, the same amount
as the Administration’s budget request, and $123 million more than the amount
approved by the House. Like the House, the Senate denied a request by the
Administration to combine funding for taxpayer service, tax law enforcement, and
IRS information systems into a new single appropriations account for tax
administration and operations. But unlike the House, the Senate gave the IRS the
same amount for tax law enforcement that the Administration asked for: $4.726
billion. What is more, the following accounts would have received an increase in
funding relative to FY2005: departmental offices (including OFAC and TFI), +$42
million; Alcohol and Tobacco Tax and Trade Bureau, +$9 million; Financial
Management Service, +$7 million; TIGTA, +$5 million; Bureau of the Public Debt,
+$3 million; FinCEN, +2 million; and Air Transportation Stabilization program and
Office of Inspector General, +$1 million. The Senate-passed version of H.R. 3058
would also have restored funding for two programs whose funding was rescinded in
FY2005: expanded access to financial services (+$4 million) and violent crime
reduction (+$1 million). Funding for three Treasury accounts would have been cut
relative to the amounts enacted for FY2005: department-wide systems and capital
investments, -$8 million; Treasury building and annex repair and restoration, -$2
million; and CDFI, -$0.1 million.
There were significant differences between the House- and Senate-passed
versions of H.R. 3058. As a result, a conference committee had to be formed in order
to resolve those differences and reach an agreement that could gain the support of
both houses. Such a committee was formed in late October, and it reached an
agreement that was spelled out in a conference report (H.Rept. 109-307) released on
November 18. Later the same day, the House approved the report on H.R. 3058 by
a vote of 392-31, and the Senate did likewise through a procedure known as
unanimous consent. President Bush signed the measure on November 30.
Under the enacted version of H.R. 3058, Treasury is receiving $11.698 billion
in appropriated funds in FY2006 — or $471 million more than it received in
FY2005. Of this amount, $10.671 billion goes to the IRS — or $435 million more
than it received in FY2005. The conference report specifies that the IRS may
reorganize or reduce its workforce only with the consent of the House and Senate
Appropriations Committees. In addition, the act gives $197 million to Treasury’s
departmental offices — or $40 million more than the amount enacted in FY2005; $40



million of this amount is to be used for combating financial crimes, $22 million of
which is to go to OFAC. The remaining accounts are funded at the following levels:
department-wide systems and capital investments programs, $24 million; Office of
Inspector General, $17 million; TIGTA, $133 million; Air Transportation
Stabilization program, $3 million (which is to be made available until spent);
Treasury building and annex repair and restoration, $10 million; FinCEN, $74
million; Financial Management Service, $236 million; Alcohol and Tobacco Tax and
Trade Bureau, $91 million; Bureau of Public Debt, $177 million; and CDFI, $55
million (which is to be available until September 30, 2007).
Internal Revenue Service (IRS). In FY2005, the IRS received $10.237
billion in appropriated funds — or 0.3% more than it received in FY2004. Of this
amount, $4.057 billion was intended for processing, assistance, and management;
$4.364 billion for tax law enforcement; $1.578 billion for information systems
management; $203 million for the business systems modernization program (BSM);
and $35 million to administer the health insurance tax credit established by the Trade
Act of 2002. These amounts reflected a rescission of 0.83% that was included in the
measure funding Treasury operations in FY2005. Of the funds appropriated for
processing, assistance, and management, Congress specified that $4 million be used
to operate the Tax Counseling for the Elderly program and that $7.5 million be used
as grants for low-income taxpayer clinics. None of the funds appropriated for the
BSM program could be spent without the consent of the House and Senate
Appropriations Committees. In addition, the IRS Commissioner was required to
submit quarterly reports to both committees in FY2005 assessing the results of the
agency’s initiatives to improve taxpayer compliance.
The Bush Administration requested that IRS operations be funded at $10.679
billion in FY2006 — or 4.3% more than the amount enacted for FY2005. To more
closely align its budget request with IRS’s major programs and current strategic plan,
the Administration proposed that the agency’s budget be restructured beginning in
FY2006. Under the proposal, the number of accounts in the IRS budget would be
reduced from six to three: tax administration and operations (TAO), BSM, and
administration of the health insurance tax credit. TAO would replace the existing
accounts for tax law enforcement; processing, assistance, and management; and
information systems. For FY2006, the Administration sought $10.460 billion in
appropriated funds for TAO — or about 5% more than the amount set aside for this
purpose in FY2005; $199 million for BSM — or 2% less than the amount enacted
for FY2005; and $20 million for administration of the health insurance tax credit —
or 41.5% less than the amount enacted in FY2005. Compared to the FY2005 budget,
the Administration was seeking $500 million more for enforcement but $38 million
less for taxpayer service and $4 million less for the BSM program. Some feared that
a reduction in funding for taxpayer service would lead to higher rates of non-
compliance among taxpayers who rely heavily on taxpayer assistance centers (TACs)
and IRS toll-free phone assistance centers to fulfill their obligations under the federal16
tax code. The Administration estimated that its budget request would boost total
full-time employment at the IRS from 97,440 in FY2005 to 97,679 in FY2006.


16 Allen Kenney, “Deja Vu? Bush Wants $500 Million for IRS to Toughen Up in 2006,”
Tax Notes, Feb. 14, 2005, p. 748.

According to budget documents issued by the IRS, the FY2006 budget request
was intended to support three key objectives in its current five-year strategic plan:
(1) continued improvement of taxpayer service; (2) strengthened enforcement of the
tax laws; and (3) continued modernization of IRS’s information systems.
Under a measure (H.R. 3058) providing appropriations for Treasury and a
handful of other federal agencies approved by the House on June 30, 2005, the IRS
would have received $10.556 billion in funds in FY2006. This amount was $319
million more than the agency received in FY2005 but $123 million less than the
amount requested by the Bush Administration. The House also rejected the
Administration’s proposed revision of the IRS budget. As a result, it is difficult to
compare the Administration’s budget request for the IRS and the funding for IRS
operations recommended in H.R. 3058. Nonetheless, it is possible to compare the
funding level approved by the House with the comparable amounts enacted for
FY2005. Of the funding level for the IRS approved by the House, $4.182 billion —
or $125 million above the level for FY2005 — would go to processing, assistance,
and management; $4.580 billion — or $216 million above the level for FY2005 —
would be set aside for tax law enforcement; $1.575 billion — or $3 million below the
level for FY2005 — for information systems; $199 million — or $4 million below
the level for FY2005 — for BSM; and $20 million — or $14 million below the level
for FY2005 — for administering the health insurance tax credit. The measure also
specified that of the funds recommended for processing, assistance, and management,
$4 million be set aside for the Tax Counseling for the Elderly program, $8 million
for grants for low-income taxpayer clinics, and $1.5 million for the IRS Oversight
Board. Furthermore, H.R. 3058 included a provision barring the IRS from closing
or consolidating any Taxpayer Assistance Centers (TACs) until TIGTA completed
a “thorough study” of the likely impact of such an initiative on taxpayer compliance.
In late May 2005, the IRS announced that it planned to close 68 of 400 TACs
by the end of FY2005; two months later the IRS announced that it was suspending
the plan until Congress had approved a budget for the agency in FY2006. Earlier in
2005, the IRS also revealed that it was planning to reduce the weekly hours of
operation for toll-free telephone assistance for individual taxpayers.
The Senate approved an amended version of H.R. 3058 by a vote of 93 to 1 on
October 20. It would have given the IRS the same level of funding in FY2006
requested by the Bush Administration: $10.679 billion — or $443 million more than
the amount enacted for FY2005 and $123 million more than the amount approved by
the House. Like the House, the Senate rejected the Administration’s proposed
restructuring of the IRS budget on the grounds that it was “overly simplistic” and
would have hindered the ability of the Senate and House Appropriations Committees
to hold the IRS accountable for its use of appropriated funds. Under the Senate-
passed version of H.R. 3058, the IRS would have received $4.137 billion for
processing, assistance, and management — or $80 million than the amount enacted
for FY2005 but $45 million less than the amount approved by the House; $4.726
billion for tax law enforcement — or $362 million more than the amount enacted for
FY2005 and $145 million more than the amount approved by the House; $1.598
billion for information systems — or $20 million more than the amount enacted for
FY2005 and $23 million more than the amount approved by the House; $199 million
for BSM — or $4 million less than the amount enacted for FY2005 but the same
amount requested by the Bush Administration and recommended by the House; and



$20 million for administering the health insurance tax credit — or $14 million less
than the amount enacted for FY2005 but the same amount requested by the
Administration and approved by the House. Like the version of H.R. 3058 passed
by the House, the measure also specified that the IRS may not cut services to
taxpayers until TIGTA completed a study assessing the likely effects on taxpayer
compliance of planned reductions in the number of TACs and the operating hours of
IRS call centers offering taxpayer assistance. The Senate also agreed with the House
in setting aside $4 million for the Tax Counseling for the Elderly program and $8
million for grants to low-income taxpayer clinics. But unlike the House-passed bill,
the version of H.R. 3058 passed by the Senate would have removed the cap imposed
by the FY1995 Treasury, Postal Service and General Government Appropriations Act
on the amount of user fees collected by the IRS in a fiscal year that it is allowed to
retain, and it would have prevented the IRS from competing with the private sector
in developing tax return preparation software by requiring the agency to continue an
agreement reached with the Free File Alliance in 2002.
The significant differences between the House- and Senate-passed versions of
H.R. 3058 meant that a conference committee needed to be formed in order to
resolve them. Such a committee was formed in late October. On November 18, it
released a conference report (H.Rept. 109-307) detailing the terms of the agreement
it had reached. Later the same day, the House approved the conference agreement
on H.R. 3058 by a vote of 392 to 31, and the Senate did likewise by unanimous
consent. President Bush signed the measure on November 30.
Under the enacted version of H.R. 3058, the IRS is receiving $10.672 billion in
FY2006 — or $435 million more than it received in FY2005. Of this amount, $4.137
billion is being used for processing, assistance, and management; $4.726 billion for
tax law enforcement; $1.599 billion for information systems; $199 million for BSM;
and $20.2 million for administering the health insurance tax credit. The act specifies
that the IRS may not reorganize or reduce its workforce without the consent of the
House and Senate Appropriations Committees. It also directs the IRS not to compete
in the market for tax return preparation software and bars the agency from reducing
taxpayer service until TIGTA completes a report on the effects of proposed service
reductions on taxpayer compliance. In addition, under the act, the IRS is required to
develop, in consultation with the IRS Oversight Board and the National Taxpayer
Advocate, a five-year plan for improving taxpayer services based on a reasonable
balance between strategic goals for enforcement and service, and to submit the plan
to the Committees no later than April 14, 2006.



Title III: Department of Housing and Urban
Development
Table 6. Title III: Housing and Urban Development
Appropriations, FY2005 to FY2006
(budget authority in $ billions)
FY2005FY2006FY2006 FY2006FY2006
Program enacted request House Sena t e Ena c t e d
Tenant-based rental14.76615.84515.63115.63615.574
assistance
(Sec. 8 vouchers)
(includes advanced
appropriatio n)
Project-based rental5.2985.0725.0885.0725.088
assistance (Sec. 8)
Public housing capital fund2.5792.3272.6002.3272.464
Public housing operating2.4383.4073.6003.5573.600
fund
HOPE VI0.143a0.000a0.0600.1500.100
Native American housing0.6220.583b0.600c0.6220.630
block grants
Native Hawaiian Blockd0.0090.009d0.009
Grant
Housing for Persons With0.2820.2680.2900.2870.289
AIDS (HOPWA)
Rural Housing Economic0.0240.000e0.0100.0240.017
Development
Empowerment Zones;0.0100.000e0.0000.0000.000
Enterprise Communities
(EZ/EC)
Community Development4.852f0.000e4.243g4.3244.220p
Fund (CDF)/Community
Development Block Grant
(CDBG) (including
supplemental funding)
g
Brownfields redevelopment0.0240.000e0.0150.010
HOME Investment1.9001.9411.9001.9001.775
P artnerships
Homeless Assistance1.2411.4401.3401.4151.340
Grants
h i h i
Self Help Homeownership0.0300.0610.061
Housing for the elderly 0.7410.7410.7410.7420.742
(Sec. 202)
Housing for the disabled 0.2380.1200.2380.2400.239
(Sec. 811)
Housing Counselingj0.040kk0.000


Assista nc e

FY2005FY2006FY2006 FY2006FY2006
Program enacted request House Sena t e Ena c t e d
Rental Housing Assistance 0.0000.0260.0260.0260.026
Research and technology0.0450.070l0.061l0.0480.056
Fair housing activities0.0460.0390.0470.0460.046
Office, lead hazard control0.1670.1190.1670.1670.152
Salaries and expenses0.5430.5790.5790.5700.579
Working capital fund0.2680.2650.0620.2650.197
Inspector General0.0790.0790.0790.0820.082
Loan Guaranteesm0.0130.0040.0040.0130.009
Appropriations subtotal36.31833.00337.22637.52937.305
Sec. 8 recaptures-1.557-2.500-2.494-1.500-2.050
( r e sc issio n)
HOPE VI rescissiona0.000-0.1430.0000.0000.000
Brownfields rescission0000-0.010n
Other rescissions-0.764o0.0000.0000.0000.000
Rescissions subtotal-2.321-2.643-2.494-1.500-2.060
Federal Housing-1.724-0.856-0.913-0.913-0.913
Administration (net)
GNMA (net)-0.357-0.357-0.357-0.357-0.357
Offsets subtotal-2.082-1.213-1.271-1.270-1.271
To tal $31.915 $29.147 $33.671 $34.759 $33.974
Source: Prepared by CRS based on information provided by the House Committee on
Appropriations, HUD’s Congressional Budget Justifications, House and Senate versions of H.R. 3058,
H.Rept. 109-153, and S.Rept. 109-109 and Conf. Rept. 109-307. FY2005 figures are adjusted to
reflect the 0.8% across-the-board rescission enacted in P.L. 108-447.
Note: This table does not include two accounts whose costs are equal to their offsetting receipts:
Manufactured Housing Fees Trust Fund ($12.9 million in FY2005 and $13 million in FY2006) and
the Office of Federal Housing Enterprise Oversight ($58.7 million in FY2005 and $60 million in
FY2006).
a. The Administration has proposed that in FY2006, Congress provide no new funding and also
rescind the HOPE VI funding provided in FY2005.
b. Includes $58 million for Indian community and economic development activities, which, in
FY2005, received $68 million as a set-aside within the Community Development Fund.
c. Includes $45 million for Indian community and economic development activities, which, in
FY2005, received $68 million as a set-aside within the Community Development Fund.
d. In FY2005, $8.9 million was provided for this program (Hawaiian Homelands Homeownership)
as a set-aside within the Community Development Fund. The Senate bill provides $8.8 million
for this program in the Community Development Fund.
e. For FY2006, the Administration proposes to eliminate these programs and replace them with a new
program funded in the Commerce Department.
f. The CDBG appropriation includes $180.8 million in CDBG supplemental funding for FY2005,
including $30.8 million appropriated under Section 424 of P.L. 108-447 and $150 million
appropriated under P.L. 108-324.
g. Two floor amendments to the House Appropriations Committee version of H.R. 3058, adding
funds to the CDF account, were approved. H.Amdt. 396 added $67.5 million to the CDF



account to increase funding for CDBG formula grants and ensure funds were available for Youth
build. H.Amdt. 404 added $24 million to the CDF account to be used for Brownfields.
h. In FY2005, $24.8 million was provided for this program as a set-aside within the Community
Development Fund. The Senate bill provides $15 million for this program in the Community
Development Fund.
i. The House bill proposed to rename this account Self-Help and Assisted Homeownership and
transfer to it funding for several set-asides that were formerly funded under the Community
Development Fund. The final version of the bill adopted the House proposal, although it
allocates the funds within the account differently.
j. In FY2005, $41.7 million was provided for this program as a component of HOME.
k. The House provides $41.7 million for Housing Counseling Assistance as a set-aside within the
HOME program. The Senate bill proves $42 million for Housing Counseling Assistance as a
set-aside within the HOME program.
l. Includes $29 million requested for University Partnerships, which, in FY2005, received a total of
$33 million as set-asides within the Community Development Fund.
m. This category includes Section 108 ($7 million in FY2005, $0 in President’s request and House
bill, $7 million in Senate bill), Native Hawaiian housing ($992,000 in FY2005 and $882,000
in President’s request and House bill, $1 million in Senate bill) and Indian housing loan
guarantees ($5 million in FY2005 and $2.6 million in President’s request and House bill, $5
million in Senate bill). For FY2006, the Administration proposes to eliminate Section 108 loan
guarantees and replace them with the new larger program in the Commerce Department.
n. The bill rescinds $10 million from prior years appropriations; however, if sufficient funds are not
available, they can be taken from current year appropriations.
o. Includes one-time rescissions of unobligated balances from the following accounts: Public Housing
Drug Elimination grants, Title VI credit subsidy, Urban Development Action Grants, rental
housing assistance and GI/SRI credit subsidy.
p. Includes $310 million for Economic Development Initiative earmarks, $50 million for YouthBuild,
$50 million for Neighborhood Initiative earmarks, $60 million for Indian CDBG, and $1.6
million for Working Capital Fund.
Department of Housing and Urban Development Budget and
Key Policy Issues17
The President’s proposed FY2006 HUD budget of $29.1 billion represented a
decline of almost 9% from the FY2005 enacted level of $31.9 billion. This decrease
resulted from several factors including a proposed transfer of the Community
Development Block Grant program (CDBG) to the Department of Commerce and the
reduction or elimination of other HUD programs. Proposed cuts to the major HUD
programs are discussed below. Proposed cuts to smaller programs include reductions
in the Lead-Based Paint Hazard Reduction program (-29%); Native American Block
Grants (-6%); Fair Housing programs (-15%); and Housing for Persons with AIDS
(-5%). Several program increases were proposed, including a $1.1 billion increase
for HUD’s largest program, the $14.8 billion Section 8 voucher program, and a $200
million increase for Homeless Assistance Grants.
On June 30, 2005, the House passed its version of H.R. 3058, the FY2006 HUD
funding bill, proposing over $4 billion more for the Department than the President


17 For more details on the proposed HUD budget, see CRS Report RL32869, The
Department of Housing and Urban Development (HUD): Fiscal Year 2006 Budget, by
Maggie McCarty, Libby Perl, Bruce Foote, and Eugene Boyd. For a similarly detailed
examination of the FY2005 budget, see CRS Report RL32443, The Department of Housing
and Urban Development (HUD): FY2005 Budget, by Richard Bourdon (coordinator), Bruce
Foote, Maggie McCarty, and Eugene Boyd.

requested. It proposed to continue to fund CDBG within HUD and would have
maintained or increase funding for several programs slated for cuts in the President’s
budget.
The Senate passed its version of H.R. 3058, the FY2006 HUD funding bill, on
October 20, 2005. The bill proposed over $34 billion for HUD, an increase over the
FY2005 budget, the President’s request, and the House-approved level. Like the
House bill, the Senate bill would have continued to fund CDBG within the HUD
budget and restored funding for a number of programs proposed for reductions.
The final conference agreement on H.R. 3058 passed Congress on November
18, 2005, and was signed into law on November 30, 2005 (P.L. 109-115). For most
accounts, the conference agreement split the difference between the House and
Senate-passed funding levels. It continues to fund CDBG within HUD, but reduces
its overall funding level. It also contains a provision restricting the use of federal
economic development funds in projects involving the use of eminent domain.18
Community and Economic Development Programs Consolidation
Proposal. The Bush Administration budget recommendations for FY2006 included
a proposal that would have consolidated the activities of at least 18 existing
community and economic development programs into a two-part grant proposal
called the “Strengthening America’s Communities Initiative (SACI).” As outlined
by the Administration, the proposal would have realigned several, but not all, federal
economic and community development programs. The most prominent of these
programs is the Community Development Block Grant program. Other HUD
programs that would have been eliminated under the Administration proposal
included Empowerment Zones, Brownfield Economic Development Initiatives,
CDBG Section 108 loan guarantees, and Rural Housing and Economic Development
Grants. If approved by Congress, the Department of Commerce would have been
responsible for administering the new program that would have replaced the 18
existing programs that are currently administered by five federal agencies.
The Administration proposal would have reduced aggregate funding from $5.6
billion in FY2005 for the programs proposed for consolidation to $3.7 billion in
FY2006 for the new program. The Administration offered a general outline of the
new programs, but it did not submit a detailed realignment proposal for congressional
consideration. It stated that the proposed new program would emphasize flexibility,
would be results oriented, and would be targeted to communities based on need. The
Administration sought this realignment, in part, because many of the 18 programs
recommended for elimination have been judged by the Administration to be
ineffective, unable to demonstrate results, or duplicative of the efforts of other federal
programs.


18 After enactment of H.R. 3058, Congress passed the FY2006 Defense appropriations bill,
which includes a one percent across-the-board rescission of all non-emergency FY2006
federal discretionary funding; that bill also included a supplemental appropriation of $11.9
billion to HUD to respond to the consequences of Hurricanes Katrina, Rita, and Wilma.

The agency that would have been most affected by the proposal is HUD;
programs administered by HUD account for nearly 81% of the $5.6 billion in
FY2005 funding. The agency’s Community Development Block Grant formula
grants represent 74% of the total. The consolidation proposal was opposed by groups
representing state and local officials including the U.S. Conference of Mayors, the
National Governors Association, National League of Cities, and National Association
of Counties. The House and Senate-passed budget resolutions for FY2006 both
included language that supported the continuation of the CDBG program. The
House version of H.Con.Res. 95 included language increasing funding for the
community and regional development budget function by $1.1 billion to $4.8 billion.
The Senate version of the budget resolution would have restored $2 billion that
would have been cut under the SACI proposal and stipulated that the funds were to
be used to support CDBG and the other 17 programs targeted for elimination by the
Administration. The conference agreement on the FY2006 budget resolution
(H.Rept. 109-62) assumed $1.5 billion more than the President requested for
Community and Economic Development purposes and the accompanying Joint
Statement of Managers indicated that the increase is intended to maintain economic
and community development programs such as CDBG at FY2005 levels.
On June 21, the House Committee on Appropriations completed consideration
of H.R. 3058, the FY2006 appropriations bill for HUD (and several other agencies).
The measure rejected the Administration’s proposed “Strengthening America’s
Communities Initiative” and recommended $4.15 billion for the CDBG program and
Economic Development Initiative (EDI) grants. This included $3.86 billion for
CDBG formula grants awarded to entitlement communities and states, which was
$250 less than appropriated in FY2005. The Committee also included $290 million
for EDI grants for congressional earmarked projects. The committee bill did not
provide funding for a number of CDBG set-asides and related programs, including
Youthbuild, Empowerment Zones, Brownfields, and Section 108 loan guarantees.
In addition, the committee bill recommended transferring funding for several CDBG-
related set-asides to other accounts within HUD. The bill included a new self-help
and assisted homeownership account that would have provided $23 million for the
Self-Help Homeownership Program (SHOP), $28 million for the National
Community Development Initiative, $3 million for the Housing Assistance Council
and $1 million each for the Special Olympics and the Native American Indian
Housing Council. Indian CDBG would have been funded as a set-aside of $45
million within the Native American Housing Block Grants account. The Committee
also recommended transferring to HUD’s Office of Policy Development and
Research $29 million in funding for university programs previously included as
CDBG set-asides under Section 107 — including assistance to historic black colleges
and universities, institutions serving Hispanic populations, and a community
development work study program.
The House approved the Committee’s recommendations, and also approved two
amendments increasing FY2006 funding for the Community Development Fund
account (CDF). The House approved by voice vote an amendment offered by
Representative Gary Miller adding $24 million to the CDF for HUD’s Brownfield
program. It also approved by voice vote an amendment introduced by Representative
Knollenberg that provided an additional $67.5 million to the CDF. Floor debate
indicated that up to $50 million of the increase was to be used to fund the Youthbuild



program, assuming it was not funded within the Department of Labor’s budget. The
remaining $17.5 million was designated for CDBG formula-based grants. This
increase would have resulted in CDBG formula-based funding at more than $230
million below the FY2005 level. During floor consideration of the bill, the chairman
of the HUD Appropriations Subcommittee, Representative Knollenberg, stated that
it was his intention to find a way to restore the CDBG formula-based program to its
FY2005 funding level.
The Senate version of the bill would have appropriated $4.3 billion for
Community Development Fund (CDF) activities, which would be a decrease of $528
million from FY2005. The bill included $3.77 billion for CDBG formula grants,
which was a $100 million decrease from the House and a $350 million decrease from
FY2005. It also included $556.2 million for CDBG-related set asides and earmarks.
Unlike the House bill, which would have provided no funding, reduced funding,
or would have transferred the activity to another account within HUD, the Senate bill
recommended retaining funding for most of the CDBG-related set-asides within the
CDF account. For instance, the Senate bill included $69 million for the Native
American CDBG while the House version would have appropriated $45 million for
the program within the Native American Housing Block Grant. The Senate bill
would have appropriated $32.4 million in funding for college and university
programs and retained the programs under the CDF account while the House bill
would have transferred these activities to the Research and Development account; it
would have appropriated $40 million for the Neighborhood Initiative Program, a
program that was not included in the President’s request or the House version of the
bill; and it would have appropriated $30 million for capacity building grants under
the National Community Development Initiative program, which is $2 million less
than the amount recommended by the House within a new Self Help and Assisted
Homeownership account.
During the Senate Appropriations Committee consideration of H.R. 3058,
Senator Bond introduced and then withdrew a proposed amendment that would have
prohibited the use of federal funds in economic development projects involving the
use of eminent domain. The amendment would have allowed the use of federal funds
if the project involved airports, seaports, mass transit, or was intended to revitalize
a blighted area.
The conference version of H.R. 3058, which was approved by the House on
November 18, and the Senate on November 21, 2005, appropriates $4.220 billion for
Community Development Fund activities including $3.748 billion for the CDBG
formula grant program. This is slightly less than the $3.770 billion recommended by
the Senate and the $3.86 billion recommended by the House. The act includes $471
million for a select number of CDF set asides and earmarks with the majority of such
funds — $310 million — allocated among 1,126 EDI earmarked projects. Of the
remaining funds $50 million is earmarked for 50 Neighborhood Initiative projects
identified in the conference report, $1.6 million for the Working Capital Fund, and
$50 million is to be awarded to local YouthBuild organizations.
The $310 million in EDI earmarks represent a 7% increase in funding for such
projects over the amount appropriated in FY2005 ($290 million) while the $3.748



billion in CDBG formula grants is 9% less than appropriated for such grants in
FY2005. The Administration, some Members of Congress, and organizations
representing states and local governments have voiced concern about the use, growth
rate, and non-competitive nature of earmarks. They argue that the steady increase in
earmark projects siphons funds from the need-based formula portion of the program.
The conference version of the act, consistent with the recommendations
included in the House, shifts funding for a number of programs previously funded
under this account to other HUD accounts. Funding for the SHOP program ($20
million), National Community Development Initiative ($30 million), the Housing
Assistance Council ($ 3 million), the National American Indian Housing Council ($1
million), and the La Raza HOPE Fund ($4 million) are now funded under a new Self-
Help Assisted Homeownership account. Assistance for minority universities and
colleges previously funded under Section 107 (Special Projects) are now funded
under the Policy Development and Research account at $20.6 million.
The Senate version of H.R. 3058 recommended continued funding of the
Section 108 loan guarantee program by appropriating $6 million in loan subsidies in
support of a loan commitment ceiling of $275 million. The Administration included
the Section 108 program in the list of programs whose activities were to be
consolidated under its Strengthening America’s Communities Initiative. The House
version of H.R. 3058 did not include funding for the program. The conference
version of the act includes $3 million in loan subsidies in support of a loan
commitment ceiling of $137 million.
Section 726 of the General Provisions of Title VII of the TTHUD
Appropriations Act for FY2006, includes the language prohibiting federal, state, and
local governments from using funds appropriated under the act for projects involving
the use of eminent domain unless such projects or activities involve a public purpose.
The provision excludes economic development “that primarily benefits private
entities” as an eligible public purpose, except in cases involving the removal of
blighted areas, brownfield redevelopment, mass transit, transportation and utility
projects that benefit the general public. Such projects would be allowed the use of
eminent domain without the loss of federal funds. The provision also directs the
Government Accounting Office and the National Academy for Public
Administration, state and local government organizations, and property rights
organizations to conduct a study-by-state study of the use of eminent domain.
For additional information on the Administration’s SACI proposal see CRS
Report RL32823, An Overview of the Administration’s Strengthening America’s
Communities Initiative, by Eugene Boyd (coordinator), Bruce Mulock, Pauline
Smale, Tadlock Cowan, Garrine Laney, and Bruce Foote.
Section 8 Voucher Funding Level and Reform Proposal. The
President’s FY2006 request for the Section 8 tenant-based rental assistance program,
also called the Section 8 voucher program, represented a 7% increase in funding over
FY2005. These additional funds were to be used to renew existing subsidies, rather
than create new subsidies. The President’s budget proposed to continue and expand
the practice of funding public housing authorities (PHAs) on the basis of fixed costs,
rather than on actual costs (as was the practice prior to FY2004), and on the basis of



fixed utilization rates, rather than on all available vouchers (as was the practice prior
to FY2005). This “budget-based” funding structure has been controversial among
some PHAs, who argue it does not provide them with sufficient funding to meet their
local needs.
Beyond funding levels, the budget request also stated that the President intended
to introduce a new proposal to reform the tenant-based voucher program. One
purpose for this reform proposal was to contain, if not reduce, costs. According to
the President’s budget summary, “Section 8’s program costs are cannibalizing every
HUD program — at the same time waiting lists of families seeking housing continue
to grow.” The FY2006 HUD Congressional Budget Justifications stated that the new
proposal would provide additional flexibility to PHAs which would enable them to
run their programs more effectively and efficiently. The Administration’s reform
proposal was introduced in the Senate (S. 771) on April 13 and in the House (H.R.
1999) on April 28, 2005, although no further action has been taken. Reform
proposals were also submitted as part of the FY2004 and FY2005 budgets; no
congressional action was taken on either proposal.
The House Appropriations Committee recommended $15.5 billion for tenant
based rental assistance, which is $765 million more than was provided in FY2005 but
$314 million less than the President requested. Under the House bill, funding would
have been allocated to agencies based on the amount they received in the previous
year, plus inflation. The $15.5 billion included a set-aside of funds that the Secretary
could have used to adjust the budgets of agencies that were negatively impacted by
the FY2005 formula due to anomalous circumstances, such as an increase in voucher
holders moving to more expensive areas. On June 30, 2005, during House floor
consideration of the bill, an amendment offered by Representative Nadler added an
additional $100 million to the tenant-based rental assistance account, increasing the
appropriation to $15.6 billion. The amendment offset the increase by decreasing
funding for the Working Capital Fund by $120 million.
The Senate-passed bill would also have funded the voucher program at $15.6
billion in FY2006. It proposed to allocate renewal funds based on agencies’ most
recent 12 months of cost and utilization data, an allocation method advocated by
PHAs and low-income housing groups. It also proposed to set aside funds to be
provided to agencies that were negatively impacted by the FY2005 distribution
formula.
The conference version of H.R. 3058 funded renewals at the President’s
requested level. It adopted the President’s requested and House approved allocation
method and set aside $45 million for the Secretary to use to adjust agency budgets.
For additional information, see CRS Report RL31930, Section 8 Housing
Choice Voucher Program: Funding and Related Issues, by Maggie McCarty.
Section 811 Housing for the Disabled. The President’s FY2006 request
for the Section 811 housing for the disabled program represented a 50% cut in
funding from FY2005. The funding provided in the request would not have been
available for capital grants to build housing units for the disabled, as in the past.
Instead the full amount would have been used to provide vouchers to persons with



disabilities. HUD budget documents do not provide a rationale for the reduction or
restriction on use for capital grants. In testimony on March 17, 2005 before the House
Appropriations Subcommittee on Transportation, the Treasury, HUD, the Judiciary,
and the District of Columbia, the Secretary of HUD referred to the need to make
unpopular cuts in programs such as Section 811 in order to maintain adequate
funding for Section 8 and programs for the homeless.
The House-passed version of the FY2006 HUD funding bill maintained Section
811 funding at the FY2005 level of $238 million, while the Senate version increased
funding to $240 million. Both bills permitted funds to be used for capital subsidies.
The enacted appropriation for FY2006 provides $239 million for Section 811, an
increase of approximately $1 million over FY2005, and twice as much as the
President’s request. Like the House and Senate versions, the conference version
includes funds for capital grants.
HOPE VI. For a third year, the President’s budget requested no new funding for
the HOPE VI Revitalization of Distressed Public Housing program. HOPE VI
provides grants to local public housing administrators (PHAs) to help fund major
redevelopment of troubled public housing projects. The Administration claimed that
the program has met its mandate and that program funds are spent too slowly;
however, the program has been popular with many local communities and Members
of Congress. Despite the President’s request, in FY2004 and FY2005, Congress
funded HOPE VI, but at a lower level than in FY2003 when over $570 million was
provided to the program. In addition to requesting no new funding for the program
in FY2006, the President’s budget requested that Congress rescind the funds it
provided to the program in FY2005.
The House Appropriations Committee recommended no FY2006 funding for
the HOPE VI program, but did not support the President’s request to rescind FY2005
funding. In House floor consideration of the bill, an amendment was adopted that
provided $60 million for HOPE VI, offset by a reduction of $60 million for the
General Services Administration’s Federal Buildings Fund. The Senate bill proposed
$150 million for HOPE VI in FY2006, slightly more than was provided in FY2005.
The conference version of H.R. 3058 funded HOPE VI at $100 million and did not
enact the rescission of FY2005 funds requested by the President. For more
information, see CRS Report RL32236, HOPE VI Public Housing Revitalization
Program: Background, Funding, and Issues, by Maggie McCarty.
New FHA Proposals. The Administration’s FY2006 budget includes
proposals for two new FHA initiatives. Under the FHA Zero Downpayment
Homeownership Option proposal, first-time buyers with strong credit records would
be allowed to finance 100% of their home purchase price and settlement costs.
Insurance premiums would be increased to cover the higher risks and costs involved.
HUD’s FY2006 budget estimates this would generate 204,000 loans and $230.5
million in net revenue. The House Committee on Appropriations did not assume
these revenues in their re-estimate of the President’s budget, resulting in a larger
proposed appropriation request for HUD. A bill to enact this proposal was
introduced in the 109th Congress as H.R. 3043. Under the FHA Payment Incentive
Homeownership Initiative, first proposed in the FY2005 budget, HUD would
amend its underwriting guidelines in order to attract borrowers who would otherwise



seek loans in the subprime market. According to HUD, the borrowers would obtain
better terms from FHA than would be possible on the subprime market. The
increased risk of default and the higher costs associated with these borrowers would
be offset by requiring more owner equity and higher insurance premiums, although
after a period of on-time payments, the premiums would be reduced. HUD’s FY2006
budget estimates this program would generate 64,000 loans a year and increase net
revenues by $37.4 million. The Committee also did not include these revenue
projections in their re-estimate of the President’s budget.
Title IV: The Judiciary
The Judiciary Budget and Key Policy Issues
Table 7. Title IV: The Judiciary Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2005 aFY2006bHousecSenate dFY2006e
Court, Agency, or ProgramEnacted RequestPassedPassedEnacted
Supreme Court, Salaries &$57.4$60.7$60.760.760.7
Expenses
Building and Grounds9.85.65.65.65.6
U.S. Court of Appeals for the21.526.524.623.524.0
Federal Circuit
U.S. Court of International Trade14.715.515.515.515.5
Courts of Appeals, District
Courts, and Other Judicial4,125.34,478.74,348.84,375.04,348.8
Services, Salaries & Expenses
Vaccine Injury Act Trust Fund3.33.83.83.83.8
Defender Services667.3768.1721.9710.8717.0
Fees of Jurors and 60.771.360.161.361.3
C o mmi s s i o n e r s
Court Security327.6390.3379.5372.4372.0
Administrative Office of the U.S.67.372.270.372.270.3
Co ur ts
Federal Judicial Center21.422.922.222.422.4
Retirement Funds36.740.640.640.640.6
U.S. Sentencing Commission13.114.714.014.714.4
To tal 5 ,426.2 5 ,970.9 5 ,767.7 5 ,778.5 5 ,756.4
Sources: U.S. Senate and U.S. House Committees on Appropriations.
Notes: House and Senate numbers may differ slightly in some instances. All figures are taken from
House budget documents, except for the Senate column. All figures have been rounded.



a. Amounts enacted for FY2005 reflect a 0.83% across-the-board rescission (P.L.108-447).
b. Amounts reflect the budget amendments the President transmitted to Congress on June 13, 2005.
c. Amounts are based on the House Committee on Appropriations budget documents.
d. Amounts are based on Senate passage of H.R. 3058 on Oct. 20, 2005, and information from the
Administrative Office of the U.S. Courts.
e. Amounts are based on the conference report, as printed in the Congressional Record, Nov. 18,
2005.
Title IV covers funding for the Judiciary. As a co-equal branch of government,
the Judiciary presents its budget to the President, who transmits the proposed judicial
branch budget to Congress unaltered. Table 7 shows the FY2005 enacted amount,
the FY2006 requested funding, the House-passed amount, the Senate-passed amount,
and the conference report, as passed.
The two accounts that fund the Supreme Court — the salaries and expenses of
the Supreme Court of the United States and the expenditures for the care of its
building and grounds — together make up less than 1.2% of the total Judiciary
budget. The structural and mechanical care of the Supreme Court building, and care
of its grounds, are the responsibility of the Architect of the Capitol. The rest of the
Judiciary’s budget provides funding for the “lower” federal courts and for related
judicial services. The largest account, making up 75% of the total budget — the
Salaries and Expenses account for the U.S. Courts of Appeals, District Courts and
Other Judicial Services — covers the salaries, benefits and operating expenses of
circuit and district judges (including judges of the territorial courts of the United
States), and those of retired justices and judges, U.S. Court of Federal Claims,
bankruptcy and magistrate judges, and all other officers and employees of the federal
Judiciary not specifically provided for by other accounts. The Judiciary budget does
not fund three “special courts” in the U.S. court system: the U.S. Court of Appeals
for the Armed Forces, the U.S. Tax Court, and the U.S. Court of Appeals for
Veterans Claims. Construction of federal courthouses also is not funded within the
Judiciary’s budget.
In his 2004 year-end annual report, released on January 1, 2005, then-Chief
Justice William H. Rehnquist stated that the Judiciary was facing a “funding crisis.”
He expressed concern about rising fixed costs to the Judiciary that have resulted in
hiring freezes, furloughs, and reductions in force while the workload continues to
increase. The Judicial Conference, the principal policy-making body for the federal
court system, has devised a cost containment strategy and has implemented measures
to reduce costs and to make operations more efficient. To alleviate budget pressures
that could lead to more staff cuts, he suggested that there be a reassessment of the
rent (which constitutes about 20% of the total budget) paid to the General Services
Administration (GSA). In January 2005, the Judiciary asked GSA for a partial rent
exemption for the federal courts.
Court security has become an increasingly critical issue since the bombing of
a federal building in Oklahoma City, the September 11 terrorist attacks, and threats
of anthrax contamination. The February 28, 2005, murders of family members of a
U.S. District Court judge in Chicago and, on March 11, 2005, of a state judge, a court
reporter, and a sheriff’s deputy in an Atlanta courthouse elevated federal judiciary
security to an even higher priority. Congress held hearings and introduced legislation
on security protection for the federal judiciary.



On April 21, 2005, Representative Louie Gohmert introduced H.R. 1751, the
Secure Access to Justice and Court Protection Act of 2005, legislation which would
do the following:
!Prohibit possession of dangerous weapons in federal courthouses,
and increase penalties for assaulting, kidnapping or murdering
judges or their families.
!Impose fines and imprisonment for filing false liens against the
property of a federal judge, federal attorney, or public safety officer
and the posting of restricted personal information about judges,
jurors or witnesses on the Internet.
!Authorize a new federal grant program for $20 million annually
(from fiscal years 2006 to 2010) to fund witness protection by states,
local governments and American Indian tribes.
On April 26, 2005, the House Judiciary Committee’s Subcommittee on Crime,
Terrorism, and Homeland Security held a hearing on H.R. 1751. The Subcommittee
held a mark-up and forwarded the bill to the full Committee on June 30, 2005. On
October 27, 2005, the House Judiciary Committee voted 26 to 5 to approve H.R.
1751, including several amendments. Representative Steve Chabot’s amendment
would authorize appellate and district judges to allow photographing, broadcasting,
or televising court proceedings. Representative Sheila Jackson-Lee sponsored two
amendments: one would authorize $3 million dollars annually (from fiscal 2006
through 2008) for grants to state and local prosecutors, and to develop protective
service programs for young witnesses and their families; and another would create
a grant program for the establishment of a threat assessment database for the
purposes of analyzing trends of domestic terrorism and crime. Representative Adam
Schiff also sponsored two amendments: one would authorize $20 million annually
(from 2006 through 2010) for the U.S. Marshals Service to hire entry and senior level
deputy marshals for the Judiciary; and another would authorize an additional $20
million annually (also from 2006 through 2010) to implement courtroom safety and
security planning for the same period of time. Representative Robert C. Scott’s
amendment would strike habeas corpus provisions from the bill. All of these
amendments were adopted. On November 9, the House passed H.R. 1751 with
several amendments, including the following:
!Representative James Sensenbrenner’s Manager’s amendment to
clarify text in the House report that the death penalty shall apply
only where death results and covers only those offenders who
qualify as principals in the killing; to make tribal courts eligible for
court security grants; and to correct drafting of coordination
requirement between U.S. Marshals and Administrative Office of
the U.S. Courts on security measures.
!Representative Steve King’s amendment to authorize any federal
judge, magistrate, U.S. Attorney, or any other officer of the
Department of Justice who represents the U.S. in a court of law to



carry firearms, subject to training and regulation that the Attorney
General prescribes.
!Representative Henry Cuellar’s amendment to add a new category
for witness protection grants for jurisdictions that share an
international border and face a demonstrable threat from cross-
border crime.
!Representative Sheila Jackson-Lee’s amendment to require the
Attorney General to work, through the Office of Justice Programs,
to make grants to the highest state courts in states participating in the
threat assessment database.
!Representative Bob Filner’s amendment to provide grants for young
witness protection to include support for young witnesses trying to
leave criminal gangs or to prevent initial gang recruitment.
!Representative Anthony Weiner’s amendment to make state and
local courts eligible for the Bulletproof Vest Partnership Grant
program; the Byrne Memorial State and Local Law Enforcement
Assistance Discretionary Grant program; the Assistance for
Children’s Justice Act grants; and State Justice Statistic program for
Statistical Analysis Center
Representative Scott sponsored two amendments, one to replace all mandatory
minimum sentences with higher maximum sentences, and another to delete language
providing the death penalty for the killing of federally funded public safety officers.
However, neither amendment was adopted.On November 10, 2005, H.R. 1751 was
referred to the Senate Committee on the Judiciary.
On May 18, 2005, the Senate Committee on the Judiciary held a hearing on
“Protecting the Judiciary at Home and in the Courthouse.” The committee heard
testimony on security challenges, and recommendations from a judge whose family
members were killed, the Chair of the Committee on Security and Facilities of the
Judicial Conference of the United States, the Director of the U.S. Marshals Service,
a U.S. Marshal, and a Chief U.S. Magistrate Judge. Subsequently, on July 29, 2005,
Senator Jon Kyl introduced the Law Enforcement Officers’ Protection Act of 2005
(S. 1605), calling for mandatory punishment for criminals who murder or assault
police officers, firefighters, judges, court employees, ambulance-crew members, and
other public-safety officers in the course of their duties. On November 7, Senator
Arlen Specter introduced the Courtroom Security Improvement Act of 2005 (S.

1968), which has components similar to those in H.R. 1751. Both Senate bills,


which have been referred to the Committee on the Judiciary, seek to provide greater
protection for judges, prosecutors, witnesses, victims and their family members, and
to institute penalties for crimes committed against them.
On March 2, 2005, the Judiciary submitted an FY2005 emergency supplemental
appropriations request for $101.8 million for the Court of Appeals, District Courts,
and Other Judicial Services, Salaries and Expenses Account, to fund costs associated
with anticipated workload resulting from recent Supreme Court rulings on sentencing



guidelines and class action suits. The Senate provided $65 million in its version of
the FY2005 supplemental (H.R. 1268/P.L. 109-13), but the conference agreement
(H.Rept. 109-72) did not include any funding for the Judiciary.19
FY2006 Request. For FY2006, the Judiciary initially requested $5.95 billion
in total appropriations, a 9.7% increase over the $5.43 billion approved for FY2005.
Of the total increase of $526.5 million, $408.3 million (78%) would be for mandatory
pay adjustments, inflation and other adjustments to the base required to maintain
current services. The remaining $118.2 million (22%) would be for workload
increases and program enhancements. In requesting an additional 1,211 full-time
equivalent staff positions (FTEs) to the 32,902 FTEs funded for FY2005, the
Judiciary seeks to continue restoring staff positions that were cut in FY2004 due to
insufficient funding and to cope with the increased workload. Current staff levels
are below FY2001 levels. During the period 2001 to 2005 there has been a 9%
increase in released felons who are supervised by federal probation officers and a
12% increase in criminal cases. Staff reductions have affected 87 of the 94 judicial
districts nationwide.
On June 13, 2005, the President transmitted to Congress two budget
amendments for the Judiciary. The first amendment requested $17.8 million to fund
28 new temporary bankruptcy judgeships, including the salaries and benefits of the
judges, their support staff, and data collection and tax return provisions (for the Court
of Appeals, District Courts and Other Judicial Services account). The additional
funds were requested in accordance with the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (P.L. 109-8). The act was signed into law on
April 20, 2005, after the FY2006 budget request had already been submitted. The
second amendment requested $690,000 for the Court Security account to provide for
one additional court security officer position in Delaware (required based on four
new bankruptcy judgeships, and security equipment associated with P.L. 109-8).
Together, these two amendments total nearly $18.5 million. The budget amendment20
request increased the total FY2006 request to $5.97 billion.
House Committee Markup. On June 21, 2005, the House Appropriations
Committee marked up the FY2006 appropriations bill for the Judiciary. The bill
would provide $5.8 billion for the federal judiciary, $341 million (6%) more than the
FY2005 level, and $203 million below the amended FY2006 request. The amount
would “fully fund the court’s revised request for security improvements at federal
judicial facilities, and enable the courts to effectively process priority criminal, civil
and bankruptcy cases.”21 The committee adopted, without objection, Representative
Todd Tiahrt’s amendment directing the U.S. Marshals Service to provide for the
security for homes of federal judges as well as managing judicial facility security.
The House Committee also expressed its expectation that the Judiciary, as it has in


19 Senate Committee on Appropriations, “Senate and House Conferees Agree to FY2005
Supplemental,” Press Release, May 3, 2005.
20 The amounts of the budget amendments are reflected in Table 7.
21 House Committee on Appropriations, “Full Committee Reports FY06 Transportation,
Treasury, Housing, and Urban Development Bill,” Press Release, June 21, 2005.

previous years, will submit a financial plan within 45 days of the enactment of the
FY2006 appropriations Act. The plan would provide information on available funds
including appropriations, fee collections, and carry-over balances, and would set the
baseline for determining if reprogramming notification is required.
House Action. On June 30, 2005, the House passed appropriations for the
Judiciary at the same level of funding as proposed by the House Committee. The
legislation also includes “the court’s revised request for security improvements at
federal judicial facilities, and enable the courts to effectively process priority
criminal, civil and bankruptcy cases.”22
Senate Committee Markup. On July 21, 2005, the Senate Committee on
Appropriations marked up the FY2006 appropriations bill for the Judiciary,
following the Subcommittee markup two days earlier on July 19, 2005. The Senate
Committee recommendation for FY2006 was $5,778.5 million, or $10.8 million
more than the House-passed amount, $5,767.7 million.
The Senate committee report (S.Rept. 109-109) stated the Committee’s concern
about the rent increases and support for the Judiciary efforts to work with the GSA
to reduce costs. The Committee also urged the Judicial Conference to consider the
size of future construction projects as well as courtroom sharing as ways to reduce
space needs. The Committee directed the Administrative Office to report to the
committee (no more than 120 days after enactment of the bill) on the financial
savings that could be realized through courtroom sharing. The Committee also
directed the Administrative Office to report to the committee (no later than June 1,
2006) on actual increases in workload that have resulted from recent Supreme Court
decisions to help the Committee better understand the workload impact of the
decisions. With regard to court security, the Committee expressed its concern about
the safety of “all Judicial employees and urges the Administrative Office to continue
to work closely with the United States Marshals Service to forge an effective and
lasting accommodation to achieve this common goal.” The Committee also allocated
$1 million to the Administrative Office to contract with the National Academy of
Public Administration to review resource and management issues (including rent
costs, court caseloads and other issues that have resulted in budget shortfalls and
subsequently resulted in the Judiciary seeking supplemental appropriations).
Senate Action. On October 19, 2005, the Senate adopted Senator Christopher
Bond’s amendment (SA2109), to provide the Judiciary with essentially the same
procurement authorities as authorized for the executive branch. The amendment’s
intent is to give the judicial branch greater parity, flexibility, and potential cost
savings. On October 20, 2005, the Senate approved appropriations for the Judiciary
at the same level of funding as proposed by the Senate Committee.
Conference Action. The conference agreement provided a 6% increase in
FY2006 funding for the Judiciary at $5.76 billion — $330.2 million above FY2005


22 House Committee on Appropriations, “House Passes FY06 Transportation, Treasury,
Housing and Urban Development Bill,” Press Release, June 30, 1005.

funding but $214.5 million below the FY2006 request. The total FY2006 funding
is $11.3 million below the House amount, and $22.l million below the Senate
amount.
Following are highlights of the FY2006 Judiciary budget:
Supreme Court. For FY2006, the total request for the Supreme Court
(salaries and expenses plus buildings and grounds) is $66.3 million, a 1.3% decrease
over the previous year. The request was for two accounts: (1) Salaries and Expenses
— $60.7 million requested, compared with the FY2005 enacted amount of $57.4
million, and (2) Care of the Building and Grounds — $5.6 million requested,
compared with $9.8 million enacted for FY2005. Most of the requested increase in
salaries and expenses was to fund mandatory increases in salary and benefit costs and
inflationary fixed costs. An additional 12 FTEs are requested for new protection and
emergency procedures to enhance the Court’s overall security. The buildings and
grounds account decreased because the previous year’s funding provided for non-
recurring projects for exterior building improvements and restoration work, and
building security upgrades. The House and the Senate passed the same amount as the
FY2006 budget request for both accounts, and the conference reflects the same
funding.
U.S. Court of Appeals for the Federal Circuit. The FY2006 request is
$26.5 million, a 23% increase over the $21.5 million for FY2005. In addition to
providing for pay and other inflationary adjustments, the requested increases support
the court’s efforts to improve security, including new perimeter security barriers and
enhanced information technology systems. The House passed $24.6 million for
FY2006 — an increase of $3.1 million above the FY2005 funding level, but less than
the amount requested. The Senate approved $23.5 million, or $1.1 million less than
the House amount.
The conference agreement provided $24.0 million — $0.6 million less than the
House amount, and $0.5 million more than the Senate amount.
Courts of Appeals, District Courts, and Other Judicial Services,
Salaries and Expenses. This account, making up almost 75% of the Judiciary
budget, funds most of the day-to-day activities and operations of the federal courts.
The FY2006 request totals $4,478.7 million, an increase of 8.1%, over the FY2005
level of just over $4,125.3 million. The House passed $4,348.8 million — an
increase of $223.5 million above the FY2005 funding level. The Senate approved
$4,375 million — $26.2 million above the House amount.
The conference agreement provided $4,348.8 million — the amount proposed
by the House. The conferees stated that there was substantial carry-over funding
from the previous fiscal year that would be available to supplement FY2006
appropriations. The conferees encourage the Judiciary to make available (within the
funding provided) $1.3 million for the Edwin L. Nelson Local Initiatives Program,
with $1 million reserved for local court grants. In addition, $672,000 was provided
for Electronic Probation Pretrial Services under the Judiciary Information
Technology Fund. The conferees also directed the Administrative Office of the U.S.
Courts to report on all new trends in caseload changes, including those resulting from



increased law enforcement activities along the borders, recently enacted bankruptcy
reform legislation, and the Supreme Court decisions concerning sentencing
guidelines. In addition, the conferees encouraged the Administrative Office to take
into consideration the district courts with heavy caseloads along the international
border as the formula for distribution of FY2006 funds is developed.
Court Security. This account provides funds for the court security officers
and for Federal Protective Service (FPS) security charges for FY2006. For FY2005,
Congress approved a transfer of funding from the Salaries and Expenses and the
Defender Services accounts to the Court Security account for FPS security charges.
The FY2006 revised request was $390.3 million, an increase of almost 20% over the
$327.6 million enacted for FY2005. The increase was mainly due to the Federal
Protective Service charges, court security officer hourly wage adjustments, and
security systems and equipment costs. The House-passed amount was $379.5 million
— an increase of $51.9 million above the FY2005 funding level. The Senate
approved $372.4 million, about $7 million less than the House amount.
The conference agreement provided $372 million — $7.5 million below the
House amount, and $426,000 below the Senate amount. Under the conference
agreement, payments to the Federal Protective Service (FPS) will be limited to not
more than $65.5 million, reflecting the conferees’ concern that the “FPS has yet to
produce a full accounting of charges to the Judiciary,” and that “security decisions
made in the field without consultation with the Administrative Office have placed in
jeopardy other important court activities.” The conferees also directed the
Administrative Office to work with the U.S. Marshals Service to resolve an impasse
over which entity would administer maintenance of the $11.9 million for security
systems provided in P.L. 109-13, the FY2005 Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and the Tsunami Relief.
Defender Services. This account funds the operations of the federal public
defender and community defender organizations, and the compensation,
reimbursement, and expenses of private practice “panel attorneys” appointed by the
courts to serve as defense counsel to indigent individuals accused of federal crimes.
The FY2006 request was $768.l million, an increase of 15.1% over the $667.4
million appropriated for FY2005. The increase was to provide for pay and
inflationary costs and to fund potential workload increase arising from recent
Supreme Court rulings. The House passed $721.9 million — an increase of $54.6
million above the FY2005 funding level. The Senate approved $710.8 million, or
$11.1 million less than the House amount.
The conference agreement provided $717 million — $4.9 million below the
House amount, and $6.2 million above the Senate amount. Although the conference
deleted language denying cost-of-living adjustments to panel attorneys (as the Senate
proposed) the issue will be revisited in FY2007.
Administrative Provisions. A number of administrative provisions for the
Judiciary were contained in the conference agreement, including the following:



!A Senate provision requiring a financial plan to serve as an
equivalent of operating plans required of other entities receiving
funding under this act.
!A Senate provision providing cost of living adjustment to justices
and judges.
!Senate language providing certain procurement authorities to the
judicial branch that are currently available to the legislative and
executive branches, and directing the Administrative Office to
provide a report to the Committee on Appropriations detailing the
two-year history of use of the authorities on or before May 21, 2008.
Supplemental Request. As a result of Hurricane Katrina, the Judiciary has
requested $65.5 million in emergency supplemental funding to cover costs associated
with the disruption of federal court operations in Louisiana, Mississippi, and Texas,
including the relocation of over 400 judges and court staff. Emergency measures
could remain in place for six months or longer. On September 16, 2005, the Judicial
Conference urged the President to transmit the supplemental request to Congress.
The supplemental request was attached to the Department of Defense appropriations
bill (P.L. 109-148); Congress provided $18 million.
Across-the-Board Cut Exemption Request. On November 4, 2005,
Chief Justice John Roberts wrote to both the President and the congressional
leadership to request that the Judiciary be exempt from any across-the-board
reductions for FY2006. He asserted that a 2% across-the-board cut applied to the
Judiciary would result in approximately 1,000 staff reductions, and “harm the ability
of the courts to fulfill their mission.” On the same day, the Judicial Conference
approved a resolution urging the Congress and the President to exempt the Judiciary
from any FY2006 across-the-board cut, and to provide funding at least at the level
requested in the Judiciary’s request. The Judicial Conference expressed concern that
an across-the-board cut would “severely jeopardize the performance of our
constitutional duties.” (This request follows the Judiciary’s appeal to the House and
Senate conferees requesting a total of $5.801 billion in order for the Judiciary to carry
out its duties.)23 The FY2006 Defense appropriations bill (P.L. 109-148) included
a one percent across-the-board rescission of all FY2006 non-emergency federal
discretionary funding; the Judiciary was not exempted.


23 The Third Branch, Judiciary Seeks to Avert Cuts, Nov. 2005, vol. 37, no. 11.

Title V: Executive Office of the President and Funds
Appropriated to the President
Executive Office of the President Budget and Key Policy
Issues
Table 8. Title V: Executive Office of the President (EOP) and
Funds Appropriated to the President Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2006 FY2006
FY2005 FY2006 House Sena t e FY2006
Office Ena c t e d* Request P a sse d P a sse d Ena c t e d
Compensation of the President$0.5$0.5 $0.5$0.5$0.5
The White House Office62.053.053.856.653.8
(salaries and expenses)
Executive Residence, White House12.712.412.412.412.4
(operating expenses)
White House Repair and Restoration1.91.71.71.71.7
Council of Economic Advisors4.04.04.04.04.0
Office of Policy Development2.33.53.503.5
National Security Council8.98.78.78.78.7
Office of Administration91.598.689.398.689.3
Office of Management and Budget67.968.467.968.476.9
Office of National Drug Control Policy26.824.226.924.226.9
(salaries and expenses)
Office of National Drug Control Policy41.730.030.030.030.0
Counterdrug Technology Assessment Center
Federal Drug Control Programs:226.5 236.0227.0227.0
High Intensity Drug Trafficking Areas Program
Federal Drug Control Programs: Other212.0213.3238.3191.4194.9
Programs
Office of the Vice President4.54.54.54.54.5
(salaries and expenses)
Official Residence of the Vice President0.30.30.30.30.3
(operating expenses)
Total, EOP and Funds Appropriated to the833.9525.0787.9730.8735.5
President
Source: Figures are from the President’s budget request and a budget authority table provided by the
House Committee on Appropriations, except Senate figures are from a budget table in S.Rept. 109-
109. Because of differing treatment of offsets, the totals will not always match the Administrations
totals. The figures within this table may differ slightly from those in the text due to supplemental
appropriations, rescissions, and other funding actions. Columns may not add due to rounding or
exclusion of smaller program line-items.
* FY2005 figures reflect an across-the-board rescission of 0.83%.



All but three offices in the Executive Office of the President (EOP) are funded
in the same appropriations act entitled the Departments of Transportation, Treasury,
and Housing and Urban Development, the Judiciary, District of Columbia, and
Independent Agencies.24
For the fifth consecutive fiscal year, the President’s FY2006 budget proposed
to consolidate and financially realign several salaries and expenses accounts that
directly support the President into a single annual appropriation, called “The White
House.” This consolidated appropriation would total $183.3 million in FY2006 for
the accounts proposed to be consolidated, an increase of 0.05% from the $183.2
million appropriated in FY2005 (after the 0.83% rescission).25 The nine accounts
included in the consolidated appropriation would be the following:
!Compensation of the President,
!White House Office (including the Homeland Security Council),
!Executive Residence at the White House,
!White House Repair and Restoration,
!Office of Policy Development,
!Office of Administration,
!Council of Economic Advisers,
!Privacy and Civil Liberties Oversight Board (authorized by P.L. 108-
458), and
!National Security Council.26
The EOP budget submission stated that consolidation would permit “the
President to immediately realign or reallocate the resources and staff available in
response to changing needs and priorities or emergent national needs.”27 The
conference committees on the FY2002 through FY2005 appropriations act decided
to continue with separate appropriations for the EOP accounts to facilitate
congressional oversight of their funding and operation.


24 Of the three exceptions, the Council on Environmental Quality and Office of
Environmental Quality are funded in the House Interior, Environment, and Related Agencies
Act and the Senate Interior and Related Agencies Act. The Office of Science and
Technology Policy and the Office of the United States Trade Representative are funded
under the same appropriations act entitled Science, State, Justice, and Commerce, and
Related Agencies (House) and Commerce, Justice, and Science (Senate).
25 P.L. 108-447, the Consolidated Appropriations Act for FY2005, at Division J, Title I,
Section 122, required a 0.83% across-the-board rescission in non-defense discretionary
spending accounts. The FY2005 appropriation for the EOP accounts proposed to be
consolidated totaled $187.126 million before the rescission.
26 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2006, Appendix (Washington: GPO, 2005), p. 980.
(Hereafter referred to as FY2006 Budget, Appendix.)
27 U.S. Executive Office of the President, Fiscal Year 2006 Congressional Budget
Submission (Washington: GPO [Feb. 2005]), p. 12. (Hereafter cited as EOP Budget
Submission.)

The FY2006 budget, for the third consecutive year, proposed a general provision
in Title VI that would provide authority for the EOP to transfer 10% of the
appropriated funds among the following accounts:
!The White House,28
!Office of Management and Budget (OMB),
!Office of National Drug Control Policy (ONDCP),
!Special Assistance to the President and the Official Residence of the
Vice President (transfers would be subject to the approval of the
Vice President),
!Council on Environmental Quality and Office of Environmental
Quality,
!Office of Science and Technology Policy,
!Office of the United States Trade Representative.29
According to the EOP budget submission, the transfer authority would “allow
the President to address, in a limited way, emerging priorities and shifting demands”
and would “provide the President with flexibility, improve the efficiency of the EOP,
and reduce administrative burdens.”30 The Consolidated Appropriations Act for
FY2005 (Section 533, Title V, Division H) authorized transfers of up to 10% of
FY2005 appropriated funds among the accounts for the White House Office, OMB,
ONDCP, and the Special Assistance to the President and Official Residence of the
Vice President.
For FY2006, the House Committee on Appropriations recommended and the
House agreed that separate appropriations for the EOP accounts be continued. The
Senate Committee on Appropriations recommended and the Senate agreed to the
same, with one exception, proposing to merge the Office of Policy Development and
its funding into the White House Office. The conference committee followed the
House provision. Section 940 of the House-passed bill and Section 716 of the Senate
bill as passed continue the authorized transfers of up to 10% among the accounts for
the White House, Special Assistance to the President and Official Residence of the
Vice President, Council on Environmental Quality and Office of Environmental
Quality, Office of Science and Technology Policy, and Office of the United States
Trade Representative. Section 725 of the conference report authorizes transfers of
up to 10% among the accounts for the White House and the Special Assistance to the
President and Official Residence of the Vice President. The OMB Director (or such
other officer as the President may designate in writing) is authorized to make such
transfers 15 days after notifying the House and Senate Committees on
Appropriations. The transferred funds are to be merged with and available for the
same time and purposes as the appropriation receiving the funds. Such transfers
cannot increase an appropriation by more than 50%. The Vice President must


28 The accounts under the White House are Compensation of the President, White House
Office (including the Homeland Security Council), Executive Residence at the White House,
White House Repair and Restoration, Council of Economic Advisers, Office of Policy
Development, National Security Council, Office of Administration.
29 FY2006 Budget, Appendix, p. 13.
30 EOP Budget Submission, p. 13.

approve transfers from the accounts for the Special Assistance to the President and
Official Residence of the Vice President.
Notable among the House Committee’s funding recommendations for the EOP
accounts are the following. Under the White House Office, $750,000 is included for
the Privacy and Civil Liberties Oversight Board and the funding for the White House
Communications Agency is transferred to DOD’s Defense Information Agency
(DIA). For OMB, the committee increases the funding and full-time equivalents and
directs that the increases be applied in the areas of Defense, Homeland Security,
Natural Resources, and Human Resources “to emphasize that the principal
responsibility for which funds are being provided is the development and the
execution of the Federal budget.” With regard to the Performance Assessment Rating
Tool (PART), OMB is required to:
include a detailed description of each program or activity or project that OMB
intends to subject to its [PART] study process for the 2007 and 2008 budgets ...
[including] the specific methodology that will be used to conduct each study, the
data that will be used in the analysis for each program studied, and office
responsible for providing OMB with information and analysis.
Under the Counterdrug Technology Assessment Center account, the committee
instructs ONDCP to submit, with its FY2007 budget request, “an analysis of options
and recommendations for the future course of counter drug technology research.” The
committee recommends that the High Intensity Drug Trafficking Areas Program
(HIDTAP) continue to be funded under the EOP (rather than under the Department
of Justice, as requested in the FY2006 budget) and fully funds the account (rather
than reducing it by 50%, as the FY2006 budget requested).
The House-passed bill includes several changes from the reported version. An
amendment offered and then modified by Representative Carolyn Maloney which
was agreed to by voice vote would provide funding of $1.5 million (an additional
$750,000) for the Privacy and Civil Liberties Oversight Board. Under an amendment
offered by Representative Darlene Hooley and agreed to by the House on a 315-103
vote (Roll No. 343), funding for OMB is reduced by $9 million and for the HIDTAP
is increased by $9 million. An amendment offered by Representative Mark Souder
and agreed to by the House on a 268-151 vote (Roll No. 344) provides funding of
$238.3 million dollars for other federal drug control programs and $145 million for
the national media campaign, an account under the programs. Both amounts
represent increases of $25 million over the House committee recommendations.
OMB’s statement of administration policy on the House version of the
legislation addresses several provisions under the EOP. It urges the transfer of the
HIDTAP to the Department of Justice and reduced funding of the program, the
consolidation of the White House Accounts and continuation of the Enterprise
Services initiative to OMB and ONDCP, and funding of the Privacy and Civil
Liberties Oversight Board at the level requested in the budget and modeling of the
board after the President’s Foreign Intelligence Advisory Board.31 The views on the


31 U.S. Executive Office of the President, Office of Management and Budget, Statement of
(continued...)

transfer of HIDTAP and the consolidation of the White House Accounts are
reiterated in OMB’s statement of administration policy on the Senate version of the
legi slation.32
The Senate Committee on Appropriations marked up H.R. 3058 on July 21,
2005. The Committee recommended $730.8 million, $33 million less than FY2005
(excluding FY2005 emergency funding for disaster relief) and $48 million less than
the House-passed amount. The difference from FY2005 and the House’s FY2006
figure is largely in a reduction for drug control programs other than the HIDTAP.
Among the Committee’s funding recommendations for the EOP accounts are these:
the Office of Policy Development and its funds are merged into the White House
Office account, OMB is funded at the level requested by the President, and, like the
House bill, the HIDTAP’s funding is increased and remains within the EOP’s
appropriation.
The Senate passed its version of H.R. 3058 on October 20,2005. The Senate
supported the Senate Appropriations Committee recommendations.
The conference agreement funds the White House Office, the Office of
Administration, and the ONDCP at the levels passed by the House. The
appropriation for the Privacy and Civil Liberties Oversight Board (under the White
House Office Account) is $1.5 million dollars. As in the House-passed bill, a
separate appropriation is provided for the Office of Policy Development. OMB is
funded at a higher level than either the House-passed or Senate-passed bills provided.
The HIDTAP is funded at the Senate-passed level. The Other Federal Drug Control
Programs account is appropriated an amount less than that passed by the House, but
more than the Senate-passed funding. Among the programs funded in this account,
a national media campaign is funded at $100 million dollars and the National Drug
Court Institute and the National Alliance for Model State Drug Laws are each funded
at $1 million dollars.
Title VI: Independent Agencies
Independent Agencies Budget and Key Policy Issues
In addition to funding for the aforementioned Departments and agencies, a
collection of 21 independent agencies receive funding through this appropriations
bill. Table 10 lists appropriations for FY2005 as enacted, and for FY2006 as


31 (...continued)
Administration Policy, H.R. 3058 — Transportation, Treasury, Housing and Urban
Development, the Judiciary, and the District of Columbia Appropriations Bill, FY2006, June
29, 2005, pp. 3-5. (Hereafter cited as Statement of Administration Policy on H.R. 3058
(House).)
32 U.S. Executive Office of the President, Office of Management and Budget, Statement of
Administration Policy, H.R. 3058 — Transportation, Treasury, Judiciary, HUD, and Related
Agencies Appropriations Bill, FY2006, Oct. 19, 2005, p. 3. (Hereafter cited as Statement
of Administration Policy on H.R. 3058 (Senate).)

requested in the President’s Budget and passed in the House and the Senate, for each
agency.
Table 9. Title VI: Independent Agencies Appropriations,
FY2005 to FY2006
(in millions of dollars)
FY2005 FY2006 FY2006 FY2006 FY2006
AgencyEnacted*RequestHouseSenate Enacted
Architectural and Transportation Barriers$6$6$6$6$6
Compliance Board
Consumer Product Safety Commission6262626363
Election Assistance Commission+1418161414
Federal Deposit Insurance Corporation:3030303131
Office of Inspector General (transfer)
Federal Election Commission5255555555
Federal Labor Relations Authority2525252525
Federal Maritime Commission1920202020
General Services Administration216219199219217
Merit Systems Protecion Board3737383838
Morris K. Udall Foundation31434
National Archives and Records311315325328329
Ad mi ni str a tio n
National Credit Union Administration
Limitation on direct loans1,5001,5001,5001,5001,500
Community Development Revolving11111
Loan Fund
National Transportation Safety Board7677777777
Neighborhood Reinvestment Corporation114118118115118
Office of Government Ethics1111111111
Office of Personnel Management (total)18,21218,74318,74218,74318,742
Salaries and Expenses124125120125123
Government Payments for Annuitants,8,1358,3938,3938,3938,393
Employees Health Benefits
Government Payments for Annuitants,3536363636
Employee Life Insurance
Payment to Civil Service Retirement9,77210,07210,07210,07210,072
and Disability Fund
Office of Special Counsel1515151515
Selective Service System+2626242625
United States Interagency Council on12122
Ho me le ssne ss
United States Postal Service630149178178178
United Staes Tax Court4149494848
Total, Independent Agencies19,75619,94819,96719,98619,989
Source: Conference Report on H.R. 3058, Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act,
2006, Congressional Record, November 18, 2005, pp. H10935-H10937.



* FY2005 figures reflect an across-the-board rescission of 0.83%.
+ Selective Service System is included in House bill; in Senate, this agency is in the Military
Construction and Veterans Affairs appropriations bill.
The Department of Homeland Security (DHS) and the Department of Defense
(DOD) are in the midst of implementing new human resources management systems
for their federal civilian employees. A significant issue for the human resources
management-related federal agencies during this appropriations cycle has been the
impact of the DHS and DOD changes on the labor-management relations and the
adverse actions and appeals workloads of the Federal Labor Relations Authority,
Merit Systems Protection Board (MSPB), and Office of Special Counsel (OSC) and
on the workforce management policies of the Office of Personnel Management
(OPM).
Merit Systems Protection Board. Both the House and Senate Committee
on Appropriations reports state that the increased funding recommended (and
approved by both houses) for MSPB is to accommodate additional appeals cases
resulting from the decisions of DHS and DOD to maintain MSPB as an arbitrator.
Office of Personnel Management. Several directives for OPM are
included in the House Committee on Appropriations report as follows. OPM is to
continue to implement and refine the new DHS and DOD personnel systems before
“bringing the system” to other agencies and departments. An FY2006 operating plan,
signed by the OPM Director, must be submitted to the House and Senate
Appropriations Committees within 60 days and include funding levels for the various
offices, centers, programs, and initiatives in the budget justification. OPM is to
include “clear, detailed, and concise” information in its budget justification on the
funding and measurement of programs. OPM and OMB must submit a report to
Congress within 90 days after the act’s enactment on:
how many veterans and disabled veterans are employed in the Federal
Government by department and agency, including in the Executive Office of the
President, the barriers that exist to hiring veterans and disabled veterans, and
ways to increase the number of veterans and disabled veterans employed in the
Federal Government to the level employed at the time of the Civil Service
Reform Act of 1978.
Notable among the funding recommended by the House Committee on
Appropriations is $680,000 for OPM to partner with the Partnership for Public
Service “to identify successful recruitment models across different college campuses”
for application to the federal government and a reduction of $3 million from the
Center for Financial Services because the budget request did not support costs related
to performance management, program evaluation, and research projects. OMB’s
statement of administration policy on the legislation identifies the $3 million funding
reduction and the prohibition on expanding civil service reform to other agencies at
this time as among the provisions that “would impede” implementation of the
President’s Management Agenda (PMA). The statement cautions that, “if the final



version of the bill were to significantly erode the PMA, the President’s senior
advisors would recommend he veto the bill.”33
The Senate Committee on Appropriations directs OPM to continue its work
with GAO and GSA in studying the child care needs of federal employees and to
reevaluate its efforts to inform and educate agencies on promoting the program which
subsidizes child care for lower income employees. Additionally, OPM is directed to
carefully consider GAO’s recommendations for modernization of the retirement
system and continue consultations with GAO on the project. The Committee
recommends funding of up to $10.3 million for e-Government projects, matching the
President’s request.
The conference report specifies that, of the $122.5 million appropriation for
salaries and expenses, $6.9 million is for the Enterprise Human Resources Integration
project, $1.4 million is for the Human Resources Line of Business project, $500,000
is for the E-training project, and $1.4 million is for the E-payroll project.
Office of Special Counsel. Directives for the Office of Special Counsel
included in the Senate Committee on Appropriations report are these: (1) that OSC
submit its FY2007 budget justification on the first Monday in February, (2) that,
concurrent with the budget submission, OSC submit a comprehensive strategy to
address capital needs and case processing, and (3) that OSC provide quarterly
staffing reports to Congress.
Federal Election Commission. The FEC administers federal campaign
finance law, including overseeing disclosure requirements, limits on contributions
and expenditures, and the presidential election public funding system; the agency
retains civil enforcement authority for the law.
The President’s fiscal 2006 budget proposed an appropriation of $54.6 million
for the FEC, a 5.5% increase above the fiscal 2005 appropriation of $51.7 million.
The increase reflects adjustments for inflation and salary and benefit increases, but
no additional funds or staff for new programs. The House Appropriations Committee
recommended and the House voted an appropriation of $54.7 million, with at least
$4.7 million designated for internal automated data systems and $5,000 for
representational and reception expenses.
The Senate Appropriations Committee recommended and the Senate voted an
appropriation of $54.6 million, the same as in the President’s budget. The Senate
specified, as did the House, that at least $4.7 million shall be designated for internal
automated data systems and $5,000 for representational and reception expenses. One
provision added in the Senate committee, to allow unlimited transfers of funds
between leadership PACs (those established, financed, maintained, or controlled by


33 U.S. Executive Office of the President, Office of Management and Budget, Statement of
Administration Policy, H.R. 3058 — Transportation, Treasury, Housing and Urban
Development, the Judiciary, and the District of Columbia Appropriations Bill, FY2006, June

29, 2005, pp. 4-5.



a federal candidate or officeholder) and national party committees, was deleted by
voice vote on the Senate floor.
The conference version adopted the House-passed appropriation level of $54.7
million, with at least $4.7 million designated for internal automated data systems and
$5,000 for representational and reception expenses.
General Services Administration (GSA). The General Services
Administration administers federal civilian procurement policies pertaining to the
construction and management of federal buildings, disposal of real and personal
property, and management of federal property and records. It is also responsible for
managing the funding and facilities for former Presidents and presidential transitions.
Typically only about 1% of GSA’s total budget is funded by direct appropriations.
Table 10. General Services Administration Appropriations,
FY2005 to FY2006
(in millions of dollars)
FY2005 FY2006 FY2006 FY2006 FY2006
Fund/OfficeEnacted*RequestHouse SenateEnacted
Federal Buildings Fund
Limitations on Availability$7,217$7,769$7,769$7,890$7,753
of Revenues
Limitations on Obligation: 709640708829792
New Construction Projects
Limitations on Obligation:9801,029961961861
Repairs and Alterations
Rescission -$106
General Activities Accounts
Government-wide Policy6253535353
Operating Expenses91100100100100
Ofice of Inspector Genral4243434343
Allowances and Office Staff33333
for Former Presidents
Federal Citizen Information1515151515
Center Fund
Electronic Govt (E-Gov) Fund35353
GSA direct appropriations total216219217219217
Source: Conference Report on H.R. 3058, Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act,
2006, Congressional Record, Nov. 18, 2005, pp. H10935-H10936.
* FY2005 figures reflect an across-the-board rescission of 0.83%.



As reported and passed in the House, H.R. 3058 provided $199.4 million in
direct appropriations. Of this total, an appropriation of $52.8 million was provided
for government-wide policy and $82.2 million for operating expenses; $43.4 million
for the Office of Inspector General; $2.9 million for allowances and office staff for
former Presidents; $3.0 million for the electronic government initiatives; and $15
million to be deposited into the Federal Citizen Information Center Fund.
As reported and passed in the Senate, H.R. 3058 provided $219 million in direct
appropriations, the same as requested by the President. The Senate and the President
recommended $5 million for the eGov fund compared to $3 million as approved by
the House (see below). Otherwise the Senate version mirrored the levels in the
House-passed version.
The committee of conference appropriated $217 million in direct appropriations.
Of this total, an appropriation of $52.8 million was provided for government-wide
policy and $99.9 million for operating expenses; $43.4 million for the Office of
Inspector General; $2.9 million for allowances and office staff for former Presidents;
$3 million for the electronic government initiatives; and $15 million to be deposited
into the Federal Citizen Information Center Fund.34
Federal Buildings Fund (FBF). Most GSA spending is financed through
the Federal Buildings Fund (FBF). Rent assessments from agencies paid into the
FBF provide the principal source of its funding. Congress may also provide direct
funding into the FBF, as occurred in FY2004, with an appropriation of $443 million.
Congress directs the GSA as to the allocation or limitation on spending of funds from
the FBF in provisions found accompanying GSA’s annual appropriations.
As approved by the House, $630.8 million shall remain available until expended
for new construction projects from the FBF, which totals $7.8 billion. For repairs
and alterations, $393 million shall remain available until expended. This amount
includes $15.7 million to implement a glass fragmentation program; $10.0 million
to implement a chlorofluorocarbons program; and amounts to provide such
reimbursable fencing, lighting, guard booths, and other facilities on private or other
property not in Government ownership or control as may be appropriate to enable the
United States Secret Service to perform its protective functions pursuant to 18 U.S.C.
§ 3056.
As passed by the Senate, H.R. 3058 recommends a limitation of $829.1 million
for the FBF (an increase of $121.0 million above House enacted amount) for the
construction of new federal facilities, and $961.4 million for repairs and alterations
(same as House enacted amount). The Senate Committee also noted that it strongly
supports the purpose and structure of the FBF, and believes that GSA rent policies
are “appropriate and necessary.” Any reduction in rent for federal courthouses will
“inhibit the ability” of GSA to address comprehensive building needs of the federal
government. The Senate Committee also directed the GSA Office of the Chief


34 In the FY2006 Defense appropriations bill (P.L. 109-148), Congress provided a
supplemental appropriation of $38 million to GSA’s federal buildings fund to respond to the
consequences of Hurricanes Katrina, Rita, and Wilma.

Architect to use $5.0 million to continue to work with the private sector to enhance
existing risk methodology designed to support structural upgrades and hazard
mitigation in new construction projects and major renovations to existing facilities.
The committee of conference authorized $792 million to remain available until
expended for new construction projects from the FBF, which totals $7.8 billion. For
repairs and alterations, $861 million shall remain available until expended.
Electronic Government Fund (E-gov Fund). Originally unveiled in
advance of the President’s proposed budget for FY2002, the E-gov Fund and its
appropriation has been a somewhat contentious matter between the President and
Congress. The President’s initial $20 million request was cut to $5 million, which
was the amount provided for FY2003, as well. Funding thereafter was held at $3
million for FY2004 and FY2005. Created to support interagency e-gov initiatives
approved by the Director of OMB, the fund and the projects it funds have been
subject to close scrutiny by, and accountability to, congressional appropriators. The
House approved the $3 million for FY2006 recommended by appropriators; the
Senate allocated $5 million. The final amount prescribed by conferees and accepted
by both chambers was $3 million.
National Archives and Records Administration (NARA). The custodian
of the historically valuable records of the federal government since its establishment
in 1934, NARA also prescribes policy and provides both guidance and management
assistance concerning the entire life cycle of federal records. It also administers the
presidential libraries system; publishes the laws, regulations, and presidential and
other documents; and assists the Information Security Oversight Office (ISOO),
which manages federal security classification and declassification policy; and the
National Historical Publications and Records Commission (NHPRC), which makes
grants nationwide to help nonprofit organizations identify, preserve, and provide
access to materials that document American history.
For FY2006, the President had requested $323 million for NARA, a modest
increase over the $264.8 million appropriated for the agency for FY2005. Of this
requested amount, the following distributions were specified: $280.9 for operating
expenses, a modest increase over the $266.9 appropriated for FY2005; $36.0 for the
electronic records archive; $6.1 million for repairs and restoration, a significant
reduction from the $13.4 appropriated for this account for FY2005; and no requested
funds for the NHPRC, which had received $5 million in FY2005.
The House approved the $325 million recommended by the appropriators for
NARA, which is approximately $10 million more than the amount requested for the
agency in the President’s budget. Of this amount, distributions would be as follows:
$283.9 for operating expenses, with $2.9 million of these funds designated for the
anticipated receipt, and initial operation, of the now privately maintained Nixon
presidential library; $35.9 for the electronic records archive; and almost $6.2 million
for repairs and restoration. For the NHPRC account, $7.5 million was recommended,
$2 for operations and the remainder for grants. An almost $8.5 million debt
adjustment in committee reduced the $333.5 million allocation to $325 million.



The Senate approved $328 million for NARA, distributed as follows: $280.9 for
operating expenses; $38.9 for the electronic records archive, with $3 million of these
funds designated for work with the National Oceanographic Office at the National
Center for Critical Information Processing and Storage at the Stennis Space Center
in Mississippi; and a little over $11.6 million for repairs and restoration, with $5.5
million of this amount provided for projects at a new regional archives and records
center in Alaska and at the Kennedy and Johnson presidential libraries. For the
NHPRC account, $5 million was allocated. An almost $8.5 million debt adjustment
was also accepted.
Conferees prescribed, and both chambers approved, $329 million for NARA,
distributed as follows: $283 million for operations, with $2 million of these funds
designated for the anticipated receipt, and initial operation, of the now privately
maintained Nixon presidential library; $37.9 million for the electronic records
archive, with $2 million of these funds designated for work with the National
Oceanographic Office at the National Center for Critical Information Processing and
Storage at the Stennis Space Center in Mississippi; $9.6 million for repairs and
restoration, with $3.5 of this amount designated for projects at a new regional
archives and records center in Alaska and at the Kennedy and Johnson presidential
libraries; and $7.5 million for the NHPRC, with $2 million for operations and the
remainder for grants. An almost $8.5 million debt adjustment in committee reduced
the $338 million allocation to $329.6 million.
Postal Service.35 The U.S. Postal Service (USPS) is self-supporting; it
generates nearly all of its funding — about $69 billion annually — by charging users
of the mail for the costs of the services it provides. Congress does provide a regular
appropriation, however, to compensate USPS for revenue it forgoes in providing, at
congressional direction, free mailing privileges for the blind and for overseas voting.
Congress has also provided funds in recent years for bio-terrorism detection in the
wake of the anthrax events of 2001.
Under the Revenue Forgone Reform Act of 1993, Congress is authorized to
reimburse USPS $29 million each year until 2035, for services provided below cost
to non-profit organizations at congressional direction in the 1990s, but not paid for
at the time. For the past 12 years, the Postal Service appropriation has consisted of
that amount, plus an estimate of the amount needed to pay for mail for the blind and
overseas voters for the current year.
In its FY2006 Budget, the Administration proposed an appropriation of $87.4
million, including $58.8 million for revenue forgone in FY2006 and a reconciliation
adjustment for underestimated mail volume in FY2002 of $28.6 million. The Postal
Service estimated that the FY2006 amount would be $79.9 million, or $21.2 million
more than OMB requested, and asked Congress to appropriate that amount. Either
amount would be supplemented by a $28.6 million reconciliation adjustment
reflecting that actual use of the subsidy in FY2002 was underestimated by that


35 Also see CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview
and Current Issues, by Nye Stevens.

amount. The Administration’s budget proposed that the $87.4 million would not be
available for obligation until October 1, 2006, which is in FY2007.
The Administration’s FY2006 budget also proposed to eliminate the usual $29
million annual payment for revenue forgone in past years that is set forth in the
Revenue Forgone Reform Act. USPS argues that cancelling the payment could result
in the whole 29-year obligation, totaling $870 million, being written off as a bad debt
and charged to current postal ratepayers.
In its detailed justification of its FY2006 budget request, USPS asked Congress
for an additional $51 million in emergency response funds to protect the safety of
employees and customers from threats such as the 2001 anthrax attack. The
Administration’s FY2006 Budget does not include any additional funds for
emergency preparedness for the Postal Service.
The House bill, as reported by committee and passed by the House, adopted the
Administration’s recommendation by providing $87.4 million for the current year’s
revenue forgone. It departed from the budget, however, in holding only $73 million
of that until FY2007, and in providing the annual $29 million for revenue forgone in
the past. The USPS request for $51 million to carry out the latter stages of the
emergency preparedness plan was not granted.
The Senate also allowed the $29 million for past revenue forgone even though
the Statement of Administration Policy on the bill opposed it. The Senate would
have made all of the payments for 2006 not payable until FY2007, but the conference
report followed the lead of the House by assigning $14.3 million of the costs to
FY2006.
Titles VII and VIII: General Provisions
The Transportation, Treasury, et al., Appropriations Act customarily includes
general provisions which apply either government-wide or to specific agencies or
programs. There also may be general provisions at the end of each individual title
within the appropriations act which relate only to agencies and accounts within that
specific title. The Administration’s proposed language for government-wide general
provisions is included in the FY2006 Budget, Appendix.36 Most of the provisions
continue language which has appeared under the General Provisions title for several
years. For various reasons, Congress has determined that reiterating the language is
preferable to making the provisions permanent. Presented below are some of the
government-wide general provisions that were proposed for elimination in the
FY2006 budget. Inclusion of the provisions in the House-passed and Senate-passed
bills and the conference report is noted.
!Section 609, which prohibits payment to political appointees
functioning in jobs for which they have been nominated, but not
confirmed. Included as Section 909 of the House bill as passed,


36 FY2006 Budget, Appendix, pp. 9-14.

Section 807 of the Senate bill as passed, and Section 809 of the
conference report.
!Section 619, which prohibits the obligation or expenditure of
appropriated funds for employee training when it (1) does not meet
identified needs for knowledge, skills, and abilities bearing directly
upon the performance of official duties; (2) contains elements likely
to induce high levels of emotional response or psychological stress
in some participants; (3) does not require prior employee notification
of the content and methods to be used in the training and written
end-of-course evaluation; (4) contains any methods or content
associated with religious or quasi-religious belief systems or “new
age” belief systems; or (5) is offensive to, or designed to change,
participants’ personal values or lifestyle outside the workplace.
Included as Section 919 of the House bill as passed, Section 817 of
the Senate bill as passed, and Section 819 of the conference report.
!Section 620, which prohibits the use of appropriated funds to require
and execute employee non-disclosure agreements without those
agreements having whistle-blower protection clauses. Included as
Section 920 of the House bill as passed, Section 818 of the Senate
bill as passed, and Section 820 of the conference report.
!Section 623, which requires that the Committees on Appropriations
approve the release of any “non-public” information, such as mailing
or telephone lists, to any person or any organization outside the
federal government. The Administration also requested repeal of
this requirement in its FY2003 and FY2005 budget requests.
Included as Section 923 of the House bill as passed, Section 821 of
the Senate bill as passed, and Section 823 of the conference report.
!Section 628, which prohibits using appropriated funds to contract
independently with private companies to provide online employment
applications and processing services. The Administration also
proposed eliminating this prohibition in its FY2005 budget request.
Included as Section 928 of the House bill as reported, but not
included in the House bill as passed and not included in the Senate
bill as passed.
!Section 635, which states that Congress recognizes the United States
Anti-Doping Agency as the official anti-doping agency for Olympic,
Pan American, and Paralympic sports in the United States. Included
as Section 934 of the House bill as passed, Section 832 of the Senate
bill as passed, and Section 834 of the conference report.
!Section 637, which prohibits the purchase of a product or service
offered by the Federal Prison Industries, Inc., unless the agency
making such purchase determines that such product or service
provides the best value. The Administration also proposed repealing
this prohibition in its FY2005 budget request. Included as Section



936 of the House bill as passed and not included in the Senate bill as
passed or in the conference report.
Among new government-wide general provisions in the FY2006 bill are those
on (1) public-private competitions for activities not inherently governmental (Section
941 of House-passed, Section 840 of Senate-passed, and Section 842 of the
conference report), (2) requirements for transfers or reimbursements to the E-
Government Initiatives (Section 942 of House-passed, and Section 841 of the
conference report), and (3) a 3.1% pay adjustment for federal civilian employees,
including those in the Departments of Homeland Security and Defense (Section 943
of House-passed, Section 836 of Senate-passed, and Section 843 of the conference
report). OMB’s statement of administration policy on the House version of the
legislation reflects strong opposition to the government-wide pay adjustment
provision and states that recruitment or retention problems “are limited to a few areas
and occupations.”37 The OMB statement that accompanies the Senate version of the
legislation expresses strong opposition to any provision providing a government-wide
pay adjustment in excess of the 2.3% recommended by the President in the FY2006
budget.38
Division B: District of Columbia Appropriations39
Table 11. Division B: District of Columbia Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2006 FY2006
FY2006 House Sena t e FY2006
FY2005* Request P a sse d P a sse d Ena c t e d
Total Federal Payments$555.5$573.4$603.4$593$603
Source: Figures are from a budget authority table provided by the House Committee on
Appropriatio ns.
* FY2005 figure reflects an across-th-board rescission of 0.83%.


37 Statement of Administration Policy on H.R. 3058 (House), p. 4. The statement discusses
concerns about several of the general provisions vis a vis the President’s constitutional
authority at p. 6.
38 Statement of Administration Policy on H.R. 3058 (Senate), p. 3. The statement discusses
concerns about several of the general provisions vis a vis the President’s constitutional
authority at pp. 6-7.
39 Prior to the reorganization of House and Senate Committee on Appropriations
subcommittee structures at the beginning of the 109th Congress, both houses of Congress had
a separate Appropriations Subcommittee for the District of Columbia appropriations.
Appropriations for the District of Columbia are now included in the responsibilities of the
House Committee on Appropriations Subcommittee on Transportation, Treasury, and
Housing and Urban Development, The Judiciary, District of Columbia, while in the Senate,
there is still a separate Appropriations Subcommittee on the District of Columbia. The
Senate added its District of Columbia appropriations bill to its Transportation et al.
appropriations bill during floor consideration. The conference bill reflects that structure,
with the District of Columbia appropriations in Division B of the bill, while all other
agencies are in Division A.

District of Columbia Budget and Key Policy Issues
President’s Request. The Administration’s proposed FY2006 budget
includes $573.3 million in federal payments to the District of Columbia. The courts
and criminal justice system (court operations, defender services, and offender
supervision) represent $470.1 million, or 82%, of the request.
District Budget. On June 2, 2005, the District’s city council approved the
city’s $8.8 billion operating budget for FY2005, and $2.7 billion in capital outlays
including $534 million to finance a new baseball stadium. The District’s budget also
includes a request for $635 million in special federal payments, which is $62 million
more than the $573 million proposed by the President and $32 million more than the
amount that was passed by the House.
House Bill. The House provided $603 million for the District, $30 million
more than the Administration request and $48 million more than enacted for FY2005.
The House approved the $470 million in FY2006 court and criminal justice funding
requested by the Administration. The House also provided $75 million in special
federal payments in support of elementary, secondary, and post-secondary education
initiatives, as requested by the Administration. This includes $13.525 million in
special federal assistance to improve the city’s public schools, $13.525 million in
support of public charter schools, $14.566 million in assistance in support of
scholarships to private and religious schools, and $33.2 million for the District’s
college tuition assistance program, $7 million more than appropriated in FY2005.
The House also provided $20 million in special federal payments to the
District’s Chief Financial Officer for various, but unspecified, education, economic
development, health and social service activities, and $10 million in federal payments
to the District Water and Sewer Authority.
In addition to recommending $603 million in special federal payments to the
District of Columbia, the bill also contains a number of general provisions, including
a number of so-called “social riders.” Consistent with provisions included in previous
appropriations acts, the bill would prohibit the use of federal and District funds to
finance or administer a needle exchange program intended to reduce the spread of
AIDS and HIV; or provided abortion services except in instances of rape, incest, or
the health of the mother is threatened. The bill would also prohibit the city from
decriminalizing the use of marijuana for medical purposes, and limit the city’s ability
to use District funds to lobby for congressional voting representation or statehood.
The House also approved an amendment banning the use of funds to enforce a
District law requiring guns in homes to be disassembled or secured by a gun lock.
Senate Bill. On July 21, 2005, the Senate Appropriations Committee reported
the District of Columbia Appropriations Act for FY2006, S. 1446 (S.Rept. 109-106).
The bill would appropriate $593 million in special federal payments for the District
and would approve the District $8.8 billion FY2006 operating budget. As reported
by the Committee, the bill recommends $33.2 million for the city’s college tuition
assistance program. This is the same amount recommended by the House and
represents a $7.8 million increase above the program’s FY2005 funding level. The
bill also includes $40 million in special federal payments in support of continued



efforts to strengthen public schools and expand elementary and secondary education
choices, including funds for public charter schools and private school scholarships.
This is $1.6 million less than recommended by the House. The bill includes $17.2
million in support of security planning ($12 million) and bioterrorism preparedness
($5.2 million for bioterrorism and forensic laboratory). This is $5 million less than
approved by the House. It would continue congressional support ($3 million — $2
million less than the House-passed level) for the construction of a nature trail along
the Anacostia River. These proposed funding reductions, which total $8.6 million,
would be offset by three new initiatives not included in the House bill: $3 million for
marriage development accounts and life skills training for low income persons; $2
million for a Latino youth education and health initiative; and $3 million for a
housing initiative for recently released ex-offenders.
Senate Bill General Provisions. The Senate bill includes a provision not
included in the House bill. It would transfer 15 acres of federal land at Robert F.
Kennedy Stadium to the District. Unlike the House bill, the Senate measure would
allow local funds to be used for lobbying for District voting representation in
Congress and to fund or operate a needle exchange program. Consistent with the
provisions included in the House bill, the Senate bill would prohibit the use of
District and federal funds to implement the District medical marijuana initiative, or
to provide abortion services except in cases of rape or incest, or the mother’s life is
endangered.
The Senate added the text of S. 1446 to H.R. 3058 and approved the
Committee’s recommendations.
Conference Bill. The conference version of H.R. 3058 was approved by the
House on November 18, 2005, and by the Senate on November 21, 2005. It
appropriated $603 million in special federal payments to the District, including $75
million in special federal payments in support of elementary, secondary, and
post-secondary education initiatives.
In addition to appropriating $603 million in special federal payments to the
District of Columbia, H.R. 3058 contained a number of general provisions, including
several so-called social riders. Consistent with provisions included in previous
appropriations acts, the bill prohibited the use of federal and District funds to finance
or administer a needle exchange program intended to reduce the spread of AIDS and
HIV; or for abortion services except in an instance of rape or incest, or when the life
of the mother is threatened. A provision not included in the final version of the act,
but included in a Senate version, would have allowed the use of local, but not federal,
funds for a needle exchange program.
The conference bill restricted the use of District and federal funds for abortion
services and prohibited the implementation of the city’s medical marijuana initiative,
which would decriminalize the use of marijuana for medical purposes. It did not
include a House provision that would have prohibited the District from enforcing a
section of its gun control laws that requires registered owners of handguns to keep
such weapons unloaded, disassembled, or trigger-locked in their homes.



The conference bill included two new initiatives: it provided $3 million for
marriage development accounts for low-income persons, and transferred 15 acres of
federal land at Robert F. Kennedy Stadium to the District for construction of a public
charter boarding school. Conferees did not include two initiatives present in the
Senate version of H.R. 3058: a $2 million Latino youth education and health
initiative and a $3 million housing initiative for recently released ex-offenders.
Cuba Sanctions40
Since 2000, either one or both houses have approved provisions in the annual
Treasury Department appropriations bill that would ease U.S. economic sanctions on
Cuba (especially on travel and on U.S. agricultural exports) but none of these
provisions was enacted. This year, the House-passed and Senate-passed versions of
the FY2006 Transportation-Treasury-Housing appropriations bill, H.R. 3058,
included identical provisions (Section 945 in the House version and Section 719 in
the Senate version) that would have prevented Treasury Department funds from
being used to implement a February 2005 amendment to the Cuba embargo
regulations that tightened restrictions on “payment of cash in advance” for U.S.
agricultural exports to Cuba. The tightened restrictions require that cash payment for
the exports is received prior to the shipment of the goods from the port at which they
are loaded. The Administration’s Statements of Policy on the bill maintained that the
President would veto the bill if it contained this provision. Ultimately the provision
was not included in the conference report to the bill (H.Rept. 109-307). Press reports
indicated that the White House also rejected, during conference, language that would
have denied $5 million to the Treasury Department’s Office of Foreign Assets
Control (OFAC) until the Treasury Department changed the tightened restrictions.41
Several House amendments to H.R. 3058 that would have eased Cuba sanctions
further failed during June 30, 2005 floor consideration: H.Amdt. 420 (Davis) on
family travel, by a vote of 208-211; H.Amdt. 422 (Lee) on educational travel, by a
vote of 187-233; and H.Amdt. 424 (Rangel) on the overall embargo, by a vote of
169-250. An additional amendment on religious travel, H.Amdt. 421 (Flake), was
withdrawn, and an amendment on family travel by members of the U.S. military,
H.Amdt. 419 (Flake), was ruled out of order for constituting legislation in an
appropriations bill.
During Senate consideration, S.Amdt. 2133 (Dorgan), proposed on October 19,

2005, would have prohibited funds from being used to enforce restrictions on travel.


The amendment was withdrawn the following day after a second-degree amendment,
S.Amdt. 2158 (Ensign), related to abortion (and unrelated to Cuba) was proposed.
Since the early 1960s, U.S. policy toward Communist Cuba under Fidel Castro
has consisted largely of efforts to isolate the island nation through comprehensive
economic sanctions, including prohibitions on U.S. financial transactions — the


40 Prepared by Mark P. Sullivan, Specialist in Latin American Affairs, Foreign Affairs,
Defense, and Trade Division.
41 “White House Rejects Compromise on Cuba Trade Provisions,” Congress Daily AM,
November 15, 2005.

Cuban Assets Control Regulations (CACR) — that are administered by the Treasury
Department’s OFAC. Restrictions on travel have been a key and often contentious
component of U.S. efforts to isolate the Cuban government. The regulations have not
banned travel itself, but have placed restrictions on any financial transactions related
to travel to Cuba. In 2004, the Bush Administration significantly tightened
restrictions on travel, and there was considerable reaction to the Administration’s
tightening of restrictions for family visits and educational travel.
Under U.S. sanctions, commercial agricultural exports to Cuba have been
allowed since 2001 under the terms of the Trade Sanctions Reform and Export
Enhancement Act of 2000 or TSRA, but with numerous restrictions and licensing
requirements. Exporters are denied access to U.S. private commercial financing or
credit, and all transactions must be conducted in cash in advance or with financing
from third countries.
Earlier this year, the Administration tightened U.S. economic sanctions against
Cuba by further restricting how U.S. agricultural exporters may be paid for their
sales. On February 22, 2005, OFAC amended the CACR to clarify that the term
“payment of cash in advance” for U.S. agricultural sales to Cuba means that the
payment is to be received prior to the shipment of the goods. This differs from the
practice of being paid before the actual delivery of the goods, a practice that had been
utilized by most U.S. agricultural exporters to Cuba since such sales were legalized
in late 2001. U.S. agricultural exporters and some Members of Congress strongly
objected that the action constituted a new sanction that violated the intent of TSRA,
and could jeopardize millions of dollars in U.S. agricultural sales to Cuba. OFAC
Director Robert Werner maintains that the clarification “conforms to the common
understanding of the term in international trade.”42 On July 29, 2005, OFAC clarified
that, for “payment of cash in advance” for the commercial sale of U.S. agricultural
exports to Cuba, vessels can leave U.S. ports as soon as a foreign bank confirms
receipt of payment from Cuba. OFAC’s action would reportedly ensure that the
goods would not be vulnerable to seizure for unrelated claims while still at the U.S.
port. Supporters of overturning OFAC’s February 22, 2005 amendment, such as the
American Farm Bureau Federation, were pleased by the clarification but indicated
that they would still work to overturn the February rule.43
Since late 2001, Cuba has purchased over $1 billion in agricultural products
from the United States. Overall U.S. exports to Cuba amounted to about $7 million
in 2001, $146 million in 2002, $259 million in 2003, $400 million in 2004, and $245
million in the first eight months of 2005, the majority in agricultural products. U.S.
exports to Cuba for January to August 2005 declined about 22% from the same time
period in 2004.44


42 U.S. Department of the Treasury, Testimony of Robert Werner, Director, OFAC, before
the House Committee on Agriculture, March 16, 2005.
43 Christopher S. Rugaber, “Treasury Clarifies Cuba Farm Export Rule, and Baucus Relents
on Nominees,” International Trade Reporter, August 4, 2005.
44 Trade Atlas. Department of Commerce Statistics.

For additional information, see CRS Report RL32730, Cuba: Issues for the
109th Congress, by Mark P. Sullivan; CRS Issue Brief IB10061, Exempting Food and
Agriculture Products from U.S. Economic Sanctions: Status and Implementation, by
Remy Jurenas; and CRS Report RL31139, Cuba: U.S. Restrictions on Travel and
Remittances, by Mark P. Sullivan.